Guest blog: How to avoid death and taxes

Category: News

Mark Twain is often cited as having coined the quotation that, “the only two certainties in life are death and taxes”. However, it seems to have originated (according to the Adam Smith Institute) in a 1789 letter from Benjamin Franklin to Jean-Baptiste Leroy. So, might it be interesting to discover that there are, in fact, some ways of avoiding these twin terrors?

I’ve been researching motivations for charitable giving over the last 15 years and am about to publish some very interesting observations, statistics, and findings[i]. One of these findings, already published, is that those people making charitable wills (containing some bequests to their favourite good causes) live longer than those making non-charitable wills[ii].

Generally, the average age at death for those who have a will in the UK is around 76 for men and 80 for women. However, if that will is charitable the average age at death is 80 for men and 84 for women. Doing something kind can prolong your life by four years!

Another conclusion from my research is that people generally acquire the giving habit very early in life. This underlines the old saying “give me the child until he is seven and I will show you the man”. This is reputed to have been said by Ignatius Loyola, the founder of the Jesuit order though others suggest Aristotle got there first.

Early years’ influence on developing religiosity is well known, but the parental, community and school influences upon people developing into charitable givers are not well known or understood. 80% of the people I interviewed cited one or more of these (usually parents) as having been very influential in their acquisition of the giving habit. Most of us give regularly to our favourite causes – in fact, more than 70% of UK adults do so.

These days giving can also be very tax-efficient. Basic Gift Aid adds 25% to the value of your gift and if you pay tax at the higher rate of 40%, you can reclaim the tax you’ve already paid between the basic rate and the higher rate. Thus, you can choose to make a £1,000 gift to a charity at a net cost (given that you pay your tax anyway) for a real cost to your net income of £600. You’ve got to want to make a difference in the first place, but the chancellor chips in with 40% if you structure it properly.

This gets even better with charitable gifts in your will. For a start, all gifts to charities in your will are UK tax-exempt. This then reduces the value of your estate that might otherwise incur a 40% Inheritance Tax hit. However, the “10 for 10” first announced by George Osbourne in 2012 is still available. That is, if you give 10% of your estate value to charities, the remaining Inheritance Tax payable will be reduced by 10% (to 36%). You can make a real difference to your favourite causes while significantly reducing your tax bill.

This all kicks in however, after your demise. So, what about that suggestion of avoiding death? We’ve already seen how being kind to your favourite causes can prolong your life, but can you go further?

Well, statistically, yes. The average charitable will is proved on average some 3.5 years after the last update. Most of us make five or six wills in our lifetimes. So, if you want to live forever, just keep updating your will every three years or less! Of course, while there is a statistical correlation, unfortunately, we have yet to prove cause and effect.

However, in the meantime, you can have a lot of fun trying because you’ll find, if you haven’t already, that charitable giving can be truly transformational. I have always been interested in why some people give and others do not. I am repeatedly drawn to my research question: why do people decide to give money to charity? In other words, what is the prompt that triggers a successful response to a request from a charity for a donation? You can read my research to find out more.

To conclude, there is perhaps a need in all of us to display some of the philanthropic qualities of the Good Samaritan, who gave his time and money to assist a stranger for the public good. In a modern context, John Nickson is himself a long-term fundraiser. In his book, Giving is good for you, John talks about how when he first started giving rather than just asking, he found the process to be transformative. There is a lesson for all involved in fundraising, both givers and askers.


Peter Maple

Peter has been a giver not a donor[iii] for more than 60 years, a fundraiser for more than 30 years and an academic for a mere 13 years.

[i] Insights into Philanthropy, an investigation into motivations for UK charitable giving (2022). Maple, P.
[ii] Legacy Trends 2019 Update. Radcliffe, R.
[iii] I believe that donors give blood and body parts. People give money and so should simply be called givers.