How to make a lasting impact with a gift in your Will

By Rosalind Barter, Legacy Manager

Legacy giving — the act of including a gift to charity in a Will — plays a vital role in supporting the charity sector. Legacy gifts accounted for £4.5 billion of charity income in 2024 and are set to double between 2022 and 2050. 

One reason for this growth is the UK tax system. It incentivises legacy giving by offering a 4% reduction in Inheritance Tax if at least 10% of your estate is donated to charity. 

But legacy giving is about more than being tax effective. It is a way to make a deeply personal and lasting impact on causes you care about. 

At CAF, we handle tens of millions of pounds in legacy gifts each year. We see first-hand how generous people are, often going well beyond this threshold, driven by passion and purpose. 

If you are looking to name a charity in your Will, here are some considerations to help guide you as you plan your lasting impact. 

Your legacy starts today

For many, a legacy gift is the first time they make a large gift to charity, especially if they were not in a position to give significantly during their lifetime. Yet, leaving all your giving until after death can mean missing out on the connection and satisfaction that comes from supporting causes while you are alive.

So, consider making donations in your lifetime, even if they are small, or volunteering with the charities you select. This can help you see the impact of your support and refine your choices as you learn more about the causes and communities you care about.

If you need help choosing which organisations to support for the causes and issues you care about, you can also explore our database of over 160,000 charities.

Future proofing your Will

Many people write their Will decades before they take effect, which can create challenges for charitable gifts. Charities may close, merge, or change focus, and the value of a fixed sum (pecuniary gift) can diminish over time due to inflation. 

Conversely, if your property or other assets have significantly increased in value in that time, you may be leaving an unexpectedly large gift to a charity. 

Generally, this is great news for a charity but large, unexpected gifts to small charities can be difficult to administer, adding extra reporting requirements and governance challenges. CAF can make sure this is handled responsibly. 

Examples of legacy gifts 

• Pecuniary gift: leaving a fixed sum of money to a charity or cause (for example, “I leave £5,000 to [Charity Name]”).
• Residuary gift: donating a percentage or share of your estate after other gifts and expenses have been paid (for example, “I leave 10% of my estate to [Charity Name]”).
• Specific gift: leaving a particular item, such as property, shares, jewellery, or artwork to a charity.
• Contingent gift: a gift that only takes effect if certain conditions are met (for example, if other beneficiaries do not survive you).
• Reversionary gift: leaving assets to a loved one for their lifetime, with the remainder passing to a charity after their death. 
  

Gifts not eligible for tax relief

Some organisations that do valuable social or charitable work may not be registered charities, so gifts to them may not qualify for tax relief. If you wish to support such organisations, it is important to understand the tax implications and seek advice on how best to structure your legacy. One option can be to work with our Legacy Service and request that, if your chosen organisation is eligible, we onward donate funds to them.

Inheritance Tax and Deeds of Variation

If you have received an inheritance from someone else’s Will, you can use a Deed of Variation to redirect part of it to charity. This can help meet the 10% threshold for Inheritance Tax relief, reducing the overall tax bill. If you are facing a large Inheritance Tax bill, you have two years after the person’s death to make this change. This could reduce the tax burden while supporting a cause you care about.

About our Charitable Legacy Service

Our Charitable Legacy Service offers solutions supporting you to navigate through these considerations and more. Our service allows you to leave one gift in your Will to benefit multiple charities. You can update your preferences at any time, and naming CAF as the only charity simplifies things for your executors. We work closely with them to make sure your legacy is received seamlessly and donated in line with your wishes.

Contribute to your legacy with our CAF accounts

• Through our Charitable Trust, you can help your legacy provide long-term support for your favourite causes. We can manage the Trust for you and distribute funds, or you could nominate a representative to do so, on your behalf.
• If you have a Charity Account, please tell us in your Legacy Letter of Wishes that you would like the balance of your account to be added to your legacy and distributed the same way as your legacy gift.

To find out more, please contact our team. We are always happy to help.