I want to leave money to charity in my will. Are there tax benefits?

What the Law Says

The Inheritance Tax Act 1984 sets out the tax treatment of charitable bequests in wills. Section 23 provides a full exemption for transfers to qualifying charities.

If you leave money or assets to a UK-registered charity in your will, that gift is completely exempt from Inheritance Tax — meaning it does not count toward your taxable estate.

Additionally, if you leave at least 10% of your net estate (after deducting debts, reliefs, and exemptions) to one or more qualifying charities, the Inheritance Tax rate on the remainder of your taxable estate falls from 40% to 36%. This reduced rate applies only to the part of your estate that is chargeable to tax — not to the charitable portion itself.

The exemption and reduced rate are automatic — no special wording is required in your will, but it’s essential that the charity is registered with the Charity Commission for England and Wales (or equivalent in Scotland or Northern Ireland) at the time of your death.

Statutory Text

A disposition made by will or intestacy to a charity is exempt from inheritance tax.

— Inheritance Tax Act 1984, s. 23 — Exemption for dispositions to charities

What to Do

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