An introduction to legacies | Legacies and leaving a legacy to CLDF

Legacies and leaving a legacy to CLDF

Why leave a legacy to CLDF?

• Help us to establish the causes of childhood liver disease
• Support our search for better treatments
• Enable us to support families affected by liver disease

All these cost money and we can only be successful with your help!

Legacies and Tax

Charitable legacies can save you tax.

Although husbands and wives can leave their estates to each other free of tax, on the second death the whole estate becomes liable to tax at 40%, with a current allowance of the first £300,000 since April 2007.

In other words, everything that is left in the will above the threshold will be taxed at 40%. Today, due to rising house prices, it is common for estates to be worth more than the threshold.

One way to reduce this tax liability is to include a legacy to a charity in your will. For every £10,000 above the threshold that is left in this way, a tax saving of £4,000 is made, as charitable legacies are tax-free.

Your solicitor will be able to give more detailed advice about inheritance tax and how to reduce your liability in your will.

What are the different types of legacy?

There are several types, depending on what you own and how you intend to distribute it.

A residuary legacy is the remainder of your estate, after debts and expenses have been paid off. It can be left in entirety to someone or an organisation, or shared among named beneficiaries. As an example, three children could receive a quarter each, with the final quarter share left to your favourite cause.

A cash sum, or pecuniary legacy, often linked to inflation. An example would be £10,000 left to CLDF, linked to the retail price index from the date of your will.

A specific item of property, such as a house, car or jewellery, left to an individual or organisation.

A reversionary legacy. This is where a benefit is left to someone during their lifetime, after which ownership is transferred to another beneficiary. A typical example is that of a house, where a relative may live until their death, when ownership passes to a charity.

Examples of wordings for legacies to CLDF can be found on the 'wordings to use in your will' page.

Deciding the purpose of your legacies

When leaving a legacy to a relative or friend, you will normally want to let them decide what they will do with it, as their needs dictate. It is always possible, however, to determine a specific purpose, if this is important to you. The same is true for charitable legacies.

To provide the maximum flexibility in how your legacy is used, you may wish to leave this decision to the discretion of the trustees of CLDF, to use your legacy as they see fit and in the best interests of the work. They will be very grateful for this flexibility.

If you are thinking of leaving a legacy to us for a specific purpose, please consider discussing this with us, as there may be various options. It is also important to avoid leaving money for projects or work which may already be completed by the time of your death.