When Frances Connolly won a massive £115 million lottery jackpot, she took inspiration from a country music legend and gave half of her fortune away.
Dolly Parton, who died back in August at age 80, is said to have given away tens of millions of dollars during her lifetime, most notably through her Dollywood Foundation.
And so Connolly did likewise, setting up Connollys’ PFC Trust to fund loneliness projects, deliver emergency food parcels, and buy respite caravans that allow young carers to take a break.
Mrs Connolly, as quoted by Sky News, reflected on her £57 million giveaway: “It depends on what you want in life. If your ambition is to be the richest person in the world and be influencing presidents, then you need to keep all your money… But I don’t know anybody who doesn’t share something.”
You might be thinking about your own wealth and the inheritance and legacy you intend to leave behind. If you’re wondering how you might go about it, or even the tax advantages of doing so, keep reading to find out more.
4 main ways to leave a charitable legacy that might be a simple alternative to a charitable trust
If you’d like to leave money to a cause you care about but don’t have £57 million to distribute, you might set up a charitable legacy in your will.
You have likely read our previous articles about the importance of a will, why you should keep it up to date, and how Penrose Wills can help. If not, you might be interested to read:
- Securing you and your partner’s legacy: Mirror wills explained
- Why you need a will as intestate deaths reach a 5-year high
- Is the UK’s ageing population leading to more contested wills?
Whether you’re writing a will from scratch or updating an outdated one, now might be a good time to add a charitable legacy. There are four main ways to do so:
1. Residuary legacy
Leave the residual value (or a share of the residual value) of your estate to charity. The residual value is the amount left once all other bequests have been made and costs (like tax and expenses) have been covered.
2. Pecuniary legacy
Arguably the easiest way to leave a charitable donation, you specify the amount you want to gift to your chosen charity, and they receive that amount when you die.
3. Specific legacy
You might choose to gift a specific item to your chosen charity, whether this is a monetary gift like an investment portfolio or specific shares, or a physical item like jewellery or furniture. The exact item must be specified in your will.
4. Contingent legacy
You can plan for different eventualities by leaving a contingent legacy, which will leave a charitable donation only if other conditions are met. For example, the prior death of a beneficiary might mean their portion of your estate goes to charity instead.
There are financial and non-financial benefits to philanthropy if you can afford it
While philanthropy is a largely selfless act, altruism isn’t without its benefits to you. Here are three.
1. Charitable giving can lower the value of your estate for tax purposes
Gifted money falls outside your estate and therefore lowers its value for Inheritance Tax (IHT) calculation purposes.
In 2026/27, you can leave an estate worth up to £325,000 (known as the nil-rate band) before there is any IHT to pay. You might also benefit from the residence nil-rate band, worth up to £175,000 if you leave your home to a direct descendant.
Estate value above these limits is usually subject to IHT at 40%, so lowering your estate’s value could lower (or even remove) your IHT liability.
2. Charitable donations could reduce the rate of IHT payable on your estate
Depending on the amount you give to charity, you might find that your philanthropy reduces the overall rate at which any IHT due is paid.
Donate 10% or more of your estate’s net value to charity, and the applicable IHT rate reduces from 40% to 36%.
If you include a charitable legacy in your will specifically to take advantage of this reduction, you’ll need to be sure your calculations are up to date, and expert advice may be required.
3. You can support causes that are close to your heart
Of course, the main reason to give to charity is to support causes you care about. The Dollywood Foundation, for example, has gifted more than 300 million free books to children under five across the world. Frances Connolly, meanwhile, uses her charitable trust to support causes in the north-east of England.
Charities are increasingly reliant on donations and charitable legacies in particular to fund their incredible work, so making this consideration in your will could make a genuine difference to a cause you care about.
Get in touch
Please email hello@globeifa.co.uk or call us on 020 8891 0711 to discuss how Globe IFA’s expert financial advisors can help you manage your estate and legacy plans.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate and tax planning, or will writing.
