The value of gifts willed to UK charities can be deducted from the value of the estate (money, possessions and property) before Inheritance Tax is worked out.
If your estate is liable to Inheritance Tax you could choose to give money to charity to reduce the overall amount of tax due from your estate. You can either leave a fixed sum (known as a ‘Pecuniary Legacy’) or part or all of your estate once other gifts have been distributed (known as a ‘Residuary Legacy’)
This can be done through your will, or simply by a declaration to the executors giving instructions as to how, and to which charity, your legacy is to be distributed. Gifts made to a UK charity in the seven years prior to your death are also covered by the same exemption from Inheritance Tax.
Free and independent advice about making wills is available from a number of organisations such as the Citizens Advice Bureau and Age Concern.
When leaving money to a charity make it clear exactly which charity you want to receive the gift. Will Aid is an organisation that helps with making wills and gives access to professional advice from volunteering solicitors in return for a suggested donation to a charity.