Leaving money to charity in your Will isn't just generous — it can also reduce your family's Inheritance Tax bill. In 2026, the charitable legacy remains one of the most powerful IHT planning tools available.
Any gifts to registered charities in your Will are completely exempt from Inheritance Tax. They're deducted from your estate before IHT is calculated, which can bring your estate below the nil-rate band entirely.
There's an additional incentive: if you leave at least 10% of your net estate to charity, the IHT rate on the rest of your estate drops from 40% to 36%. On a £500,000 estate (after the nil-rate band), this could save your family £7,000.
The 10% calculation can be complex because it's based on the 'baseline amount' of the estate, which is the net value after deducting debts, liabilities, reliefs, exemptions, and the nil-rate band. Professional advice ensures the calculation is done correctly.
You can leave a specific amount, a percentage of your estate, or specific assets to charity. A percentage gift has the advantage of maintaining its proportional value regardless of how your estate's value changes over time.
Many charities offer free Will writing services in partnership with solicitors. However, these may not include the comprehensive estate planning advice you need. A specialist advisor can ensure your charitable giving is structured for maximum benefit.
At Castle Family Legal, we can help you incorporate charitable giving into your estate plan in the most tax-efficient way. Contact us to discuss your wishes.
