Charity legacies from wealthy individuals on the rise
A number of wealthy individuals gifting over £1 million to charities has risen by almost a third in 2017/18, according to HMRC data.
HMRC revealed that those persons, known as high net worth (HNWs) individuals, who had left legacies to numerous charities, amounting to over £1m had in fact increased by 31%.
The number of transfers to charities on death worth over a million had increased to 3,043 from 2,328 the previous year, according to UK law firm Boodle Hatfield.
This will be welcome news to the charity sector, especially as they have been hit hard due to Covid-19 – as there is currently an estimated £10.1 billion funding shortfall within the sector due to the pandemic.
Eleanor Sepanski, Partner at Boodle Hatfield, said:
“The hope of many charities is that continued donations from HNWs make up for any fall in donations from the broader population.”
“Charitable giving upon death offers a huge financial boost for many charities. However, HNWs should consider switching to lifetime giving rather than waiting to donate a lump sum to charities upon death – particularly as the sector urgently needs help.
Matthew Lagden, CEO of Institute of Legacy Management commented on the HMRC data. He said:
“ILM welcomes this research which bears out what our members have been experiencing: that people of all wealth levels, including the very wealthy, are becoming increasingly generous when it comes to leaving gifts in their wills.
“This is testament to the joint efforts of charities, sector bodies such as ourselves and Remember a Charity, and the will writing profession in promoting charity legacies as a form of giving.
“This year has been the most difficult year in living memory for charities, with many suffering very significant shortfalls in funding due to the pandemic, and the continued strength of legacy giving has enabled many charities to keep operating.”
Rob Cope, director of Remember A Charity – a consortium of 200 UK legacy charities further added:
“Charitable legacies are the largest single source of voluntary donations and have a huge impact on charities’ ability to deliver frontline services. The growth of high level gifts – particularly in the current climate – is critical and clearly demonstrates that there is a real drive for philanthropy, and specifically for leaving gifts in Wills. These substantial donations have enabled charities to keep their doors open and to keep services, supporting communities across the UK.
“Fiscal incentives are a key part of the picture, playing a vital role in inspiring those with wealthier estates to donate generously to the causes they care about, while reducing tax due from their estate. Just a couple of years ago, the inheritance tax break was under review and we successfully lobbied to protect it. Continued growth of large legacy gifts clearly shows just how powerful that incentive can be, particularly for those whose estates hover just above the inheritance tax threshold.”
Remember A charity also confirmed that in regards to legacy gifts in general, a broad range of charities benefit from legacy gifts each year, which amounts to more than 10,000 charities according to Wills notification service provider, Smee & Ford. And that the number (and breadth) of charities named in Wills is on the rise over the long term – with smaller charities increasingly benefitting from legacy gifts.