Leaving Money to Charity in a Will

How do you leave money to a charity in your will?

Identify the charity by its full registered name and registered charity number, and say what should happen if it no longer exists when you die. Charities merge and close, and vague wording creates disputes.

Many charities share similar names, so the charity number is what puts the gift beyond doubt. A fallback direction, either naming a substitute charity or letting your executors choose one with similar purposes, stops the gift failing if the charity has wound up or merged. The gift itself can be any type of bequest: a fixed sum, a specific asset, or a share of your residuary estate, which is the form most large charitable legacies take. Larger gifts sometimes fund a named endowment, and a charitable foundation or trust follows the same identification rules in your last will and testament.

Is a charitable gift in a will free of inheritance tax?

Yes. Gifts to qualifying UK-registered charities are wholly exempt from inheritance tax, with no cap at all on the amount. The donation is deducted from the estate before any tax is worked out at probate.

Gov.uk’s inheritance tax guidance confirms both the exemption and the reduced rate. Since April 2024, most charities outside the UK no longer qualify for the exemption, so an older will leaving money to an overseas charity is worth reviewing. The exemption applies to the charity’s gift itself, and the knock-on effect on the rest of the estate is where the 10% rule comes in.

What is the 10% rule for the reduced inheritance tax rate?

If at least 10% of your estate’s net value goes to charity, the inheritance tax rate on the taxable remainder drops from 40% to 36%. The calculation is precise, so the threshold needs checking properly rather than estimating.

The practical effect is that a qualifying charitable gift costs your other beneficiaries less than its face value, because the tax saved offsets part of the gift. Whether a specific estate clears the 10% threshold depends on how the net value is calculated, including allowances and how assets are owned, which is genuinely a point to take advice on rather than assume. Wording the gift as a percentage of the estate, rather than a fixed sum, is the common way to keep the threshold met as values change.

Can you add a charity to an existing will?

Yes, either through a codicil for a simple addition or a new will for anything that changes the wider distribution of your estate. Many charities run schemes covering the cost of a will that includes a gift to them.

A codicil suits a single, straightforward addition, executed with the same signing and witnessing formalities as a will. If the charitable gift changes how the rest of the estate divides, a new will is cleaner. Free will-writing schemes run by charities can be a genuine saving, usually with no obligation to leave a gift. The wording still needs the same care over names, numbers, and fallbacks, since gov.uk’s guidance on making a will applies equally to every charitable clause.

Frequently asked questions

Do you pay less inheritance tax if you leave money to charity?

Potentially in two ways. The charitable donation itself is exempt, shrinking the taxable estate, and if it reaches 10% of the estate’s net value, the rate on the taxable remainder falls from 40% to 36%. Whether the threshold is met needs proper calculation for your estate.

What is the best way to leave money to charity in a will?

A share of your residuary estate is the most common structure for meaningful gifts, since it scales with the estate’s value and helps a percentage-based threshold stay met. Whatever the form, identify the charity by registered name and charity number, and always include a fallback direction.

Can I leave money to a charity abroad?

Since April 2024, most non-UK charities no longer qualify for the UK inheritance tax exemption, so the gift can still be made but may be taxed. Wills written before 2024 that include overseas charities are worth reviewing, since the tax treatment the will assumed may no longer apply.

What happens if the charity closes before I die?

Without a fallback, the gift can fail and fall into your residuary estate. With a fallback naming a substitute, or directing your executors to choose a charity with similar purposes, the gift survives. Charity mergers are common, which is why the fallback wording is standard practice.