Charity Legacies: Tax Benefits and Legacies

Help protect endangered species and their habitats through a legacy to the World Land Trust

In the UK, legacies to charity do not incur inheritance tax (death duties). Consequently you could save 40% inheritance tax, and, for example, a donation of £2500 would only cost your estate £1500.

You can decide which conservation project your legacy will support

After death heir(s) can also make a gift, in the dead person’s name. If they do so before completing the IHT 200 they can simply enter it under Exemptions and Reliefs.

The Gift can be made any time up to two years of the death by drawing up a deed of variation and sending it to the Inland Revenue.

However, many estates will not be liable for inheritance tax and a gift to charity by such estates will not produce any change in the tax position.

The Inland Revenue produce several useful publications:

• 'Alterations to an inheritance following a death' (IHT 8)
• 'Instruments of Variation 2' (this gives a clear guide as to how to draw up a deed of variation, with an example of the exact wording)
• A Deed of Variation checklist (IOV2). You can use this to determine whether you have correctly made a deed and if you have to submit it to the IR to be checked.

Inheritance tax forms are available online at:

www.inlandrevenue.gov.uk/cto/forms3.htm

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