Ahead of Wills Week in support of St Christophers Hospice, we look at how charitable giving can strengthen your estate planning

Have you ever considered how your estate planning could support the causes you care about most — while also reducing the inheritance tax your family may have to pay? Including charitable giving in your estate planning allows you to reflect your values, make a lasting difference, and use the tax rules to your advantage.

In the UK, charities rely heavily on donations to fund vital work across countless causes. By building charitable gifts into your estate planning, you can ensure your assets go where they matter most — benefiting both your chosen charities and your loved ones.

The Benefits of Charitable Giving in Estate Planning

Charitable giving offers both financial and personal rewards.

The most immediate benefit is inheritance tax relief. Charitable gifts are taken out of your estate before IHT is calculated. If you leave at least 10% of your net estate to charity, the reduced 36% tax rate applies to the rest. On a taxable estate of £500,000, this alone could save £20,000 for your beneficiaries.

Beyond tax savings, charitable giving allows you to support causes you believe in and create a meaningful legacy. In the UK, legacy gifts through wills are now one of the largest sources of funding for charities.

Key benefits include:

• Reducing your estate’s inheritance tax bill
• Supporting organisations and causes that matter to you
• Leaving a lasting legacy aligned with your values
• Potentially increasing the amount your other beneficiaries receive
• Gaining flexibility through charitable trusts (see below)

Ways to Make Charitable Gifts Through Your Estate

There are several ways to include charitable giving in your estate planning.

Cash Gifts and Legacies

Leaving money to charity in your will is the simplest option. You can leave a fixed amount or a percentage of your estate. Percentage gifts are often preferred, as they automatically adjust if the value of your estate changes.

Lifetime cash donations can also benefit from Gift Aid, which allows charities to reclaim basic rate tax — increasing the value of your donation at no extra cost to you.

Property and Other Assets

You can leave property or valuable items, such as land, artwork, or antiques, to charity. These gifts are exempt from inheritance tax and might also avoid capital gains tax on assets that have increased in value.

Shares and Investments

Donating shares to charity is one of the most tax‑efficient ways to give. You receive income tax relief on the full market value, and no capital gains tax is payable. The charity receives the full value of the shares.

Charitable Trusts

Charitable trusts allow you to support charitable causes in a structured and flexible way. Assets placed into a qualifying charitable trust are exempt from inheritance tax, capital gains tax, and income tax.

Charitable trusts can be set up during your lifetime or through your will. You can support specific charities, a group of charities, or general charitable purposes. Family members can also act as trustees, helping to continue your charitable legacy across generations.

Final Thoughts

Charitable giving is one of the most effective tools available in estate planning. It can reduce inheritance tax, support causes you care about, and create a meaningful legacy for future generations.

Whether through cash gifts, shares, property or charitable trusts, there are flexible options to suit your circumstances. Getting specialist legal advice ensures your charitable giving is structured correctly and that you benefit fully from the tax reliefs available.