Leaving a Charitable Legacy in Your Will UK (2026)

How charitable gifts are treated for IHT

Under the Inheritance Tax Act 1984 (IHTA 1984), gifts to qualifying charities are an exempt transfer. The charity is treated as if it receives the gift tax-free, and the gift is deducted from the value of your estate before IHT is calculated. If your estate is worth £500,000 and you leave £50,000 to charity, HMRC taxes the remaining £450,000 (minus your nil-rate band), not the full £500,000.

This is different from gifts to individuals, which are either potentially exempt transfers (PETs) or chargeable transfers depending on the recipient and structure.

The 10% rule — how to pay 36% IHT instead of 40%

Schedule 1A IHTA 1984 (inserted by the Finance Act 2012) introduced a reduced IHT rate of 36% for estates where at least 10% of the baseline amount is left to charity.

The baseline amount is broadly: your estate at death, minus the nil-rate band (£325,000), any residence nil-rate band, the spousal/civil partner exemption, debts, and funeral expenses. It is sometimes called the ‘net chargeable estate’.

Example: does the 10% rule save money?

Figures illustrative. Estate value £1m, single NRB £325,000, baseline £675,000. 10% threshold = £67,500.

In the third row, the family actually receives more than in the second row, even though a larger gift went to charity. This is the core insight: at exactly the 10% threshold, the tax saving can offset the larger gift.

Which charities qualify?

A charity qualifies if it is:

• Registered with the Charity Commission for England and Wales (charitycommission.gov.uk)
• Registered with OSCR (Scottish charities)
• Registered with CCNI (Northern Irish charities)
• Established and regulated in an EU or EEA state (under IHTA 1984 s23A)
• A community amateur sports club (CASC) registered with HMRC
• A political party — if it had at least two MPs elected at the last General Election or received at least 150,000 votes (IHTA 1984 s24)

Informal community groups, unregistered charities, and private foundations do not qualify. Always include the charity’s registered charity number in your will to avoid ambiguity.

Fixed sum vs percentage legacy — which is better?

You can leave a charity a pecuniary legacy (a fixed sum, e.g. “£10,000 to Cancer Research UK”) or a share of residue (e.g. “10% of my residuary estate”).

A percentage is usually preferable for three reasons:

1. It automatically adjusts if your estate grows or shrinks over time.
2. If you want to trigger the 36% IHT rate, a percentage clause is more likely to stay at or above the 10% threshold.
3. It is not eroded by inflation the way a fixed sum might be.

The downside of a percentage is that it creates uncertainty for both the charity and your family. A fixed sum is predictable. If predictability matters, you can combine the two: a small fixed sum to the charity plus a residue split that keeps the charitable share near 10%.

Wording a charitable legacy correctly

A simple charitable gift clause might read:

“I give [10%] of my residuary estate to [Full Charity Name] (Registered Charity Number [XXXXXX]) for its general charitable purposes. If that charity has ceased to exist or amalgamated with another body, I direct my executors to apply this gift to a charity with similar objects.”

The cy-près clause (“if that charity has ceased to exist”) protects the gift if the named charity is dissolved before you die. Without it, the gift could lapse and fall back into your residuary estate — losing the IHT exemption.

Leaving a gift to charity via a codicil

If you have an existing will and want to add a charitable gift without rewriting the entire document, you can execute a codicil. A codicil has the same formality requirements as a will: signed by you in the presence of two independent witnesses (who also sign). A solicitor-drafted codicil typically costs £50–£150.

If the codicil brings your total charitable gifts to 10% or more of the baseline amount, it will trigger the 36% rate.

Interaction with Gift Aid during your lifetime

Will gifts are not Gift Aid eligible — Gift Aid applies to lifetime donations from income, not legacies. However, you should be aware that if a charity receives a legacy and the estate pays the IHT (rather than the charity paying), the interaction is different from a lifetime Gift Aid donation. The charitable exemption and the 36% rate apply at the estate level; the charity does not need to claim anything separately.

Charitable gifts and the spousal exemption

If you are leaving your estate to a surviving spouse/civil partner (who receives the full spousal exemption) and also want to trigger the 36% IHT rate via a charitable gift, be aware that the spousal exemption is already deducted before the baseline amount is calculated. The 10% threshold must still be met out of the taxable residue — not out of the exempt spouse share.

Should you tell the charity?

There is no legal obligation to notify a charity that you have named it in your will. However, it is good practice:

• The charity can acknowledge your pledge and keep you informed about its work.
• Your executors will know exactly which charity to contact and can obtain the correct bank details at the time of administration.
• Many charities offer a legacy pledge service — a non-binding record of your intention that does not alter your will.

Remember: telling the charity is not binding. You can change your will at any time while you have mental capacity.

Practical checklist for a charitable legacy

• Identify the charity’s full registered name and charity number.
• Decide: fixed sum, percentage of residue, or specific asset (e.g. shares).
• Check whether the gift reaches or exceeds 10% of your estimated baseline amount to qualify for the 36% rate.
• Include a cy-près clause in case the charity ceases to exist.
• Consider informing the charity so your executors have a point of contact.
• Review the gift every few years — your estate value and the charity’s registration status can change.

Frequently asked questions

Related guides

• How to reduce your inheritance tax bill
• IHT-exempt gifts: the annual allowance and taper relief
• Nil-rate band and transferable NRB explained
• Pecuniary, specific, and residuary legacies compared
• What to include in your will