Charity Legacy Giving: A Practical Guide for UK Charities | LegalDocuments.co.uk
We're not a law firm — we help you find the right legal support. For advice on your situation, speak to a legal adviser or find a solicitor.
Legacy giving sits quietly at the heart of long-term charity funding in the UK. For many organisations, gifts left in wills are the single largest source of voluntary income, and they often fund the work that grant cycles and one-off donations cannot sustain.
Yet the legal and practical side of receiving, managing and encouraging these gifts is rarely straightforward. Charities have to balance donor wishes with trustee duties, tax rules with regulator expectations, and sensitivity with good governance. This guide sets out what UK charities should understand about legacy gifts, how to work with supporters who are thinking about leaving a bequest, and where the common pitfalls lie.
It is written for fundraisers, trustees and charity managers who want a clearer picture of how legacy giving works in practice and where professional input is genuinely needed.
Overview
A charitable legacy is a gift made through a person's will that passes to a charity when they die. The most common forms are pecuniary legacies (a fixed sum of money), specific legacies (a named asset such as shares or property) and residuary legacies (a share of whatever is left after debts, tax and other gifts have been paid).
Some supporters also use trust structures to give over longer periods or to split benefit between family and charity. For the charity receiving the gift, legacy income is shaped by several overlapping rules: the law of wills and probate, charity law duties owed by trustees, the Charities Act framework, HMRC rules on inheritance tax and Gift Aid, and the Fundraising Regulator's Code of Fundraising Practice.
Each legacy gift is effectively a small legal project, from confirming the validity of the bequest, to liaising with executors, to checking that the charity named is in fact your organisation. Handled well, it is an area where relatively modest investment in process and relationships can produce substantial long-term income.
Key steps
- Build a clear legacy policy and governance framework. Before approaching supporters about gifts in wills, trustees should agree a written legacy policy covering what gifts the charity will accept, how disputes with executors are handled, who signs off on compromises, and how restricted legacies are managed. This gives staff confidence and reduces risk when difficult cases arise.
- Talk to supporters sensibly about wills and bequests. Charities cannot draft wills for donors, and fundraisers should never appear to be giving legal advice. What you can do is provide clear information about the different types of legacy, suggested wording a supporter can take to their own solicitor, and your registered charity name and number so the gift reaches the right entity.
- Work closely with solicitors, executors and probate professionals. When a legacy is notified, the charity becomes a beneficiary with real legal rights. Keeping organised records, responding promptly to estate accounts, and querying anything unclear is part of a trustee's duty to protect charitable assets. Many charities use specialist legacy officers or external legacy management services for this.
- Understand inheritance tax, Gift Aid and related reliefs. Gifts to UK charities in a will are generally exempt from inheritance tax, and estates that leave at least 10% of the net estate to charity may benefit from a reduced IHT rate on the rest. Gift Aid applies to lifetime gifts rather than legacies, but both sit together in a donor's overall giving picture and are worth explaining clearly.
- Steward legacy pledgers and honour donor intentions. Supporters who have told you they are leaving a gift deserve careful, long-term stewardship without pressure. Keep a confidential pledger record, thank them appropriately, share impact stories, and make sure that when the gift eventually arrives it is used in a way that genuinely reflects what the donor cared about.
Common questions
Q What is the difference between a pecuniary, specific and residuary legacy?
A pecuniary legacy is a fixed cash sum, such as u00a35,000 to a named charity. A specific legacy is a particular asset, for example a property or a shareholding. A residuary legacy is a share of whatever remains of the estate after debts, expenses, tax and other legacies have been paid. Residuary gifts tend to hold their value better against inflation, which is why many charities encourage supporters to consider them.
Q Are charitable legacies exempt from inheritance tax?
Gifts to qualifying UK charities in a will are generally exempt from inheritance tax, which means the value of the charitable gift is deducted before IHT is calculated on the rest of the estate. If an estate leaves at least 10% of its net value to charity, a reduced IHT rate may apply to the taxable portion. The exact position depends on the estate, so executors and donors typically need professional tax input. Check gov.uk for the current rates and thresholds.
Q Can a charity help a supporter write their will?
No. Charities and their fundraisers should not draft wills or give legal advice on personal estate planning. What you can do is provide suggested legacy wording, explain the different types of gift at a general level, and signpost supporters to an independent solicitor or a will-writing scheme. Keeping this boundary clear protects both the supporter and the charity from later disputes about undue influence.
Q What are trustees' duties when the charity is named in a will?
Once a charity is a beneficiary, trustees have a duty to take reasonable steps to secure the gift and use it for the charity's purposes. That includes confirming the bequest with executors, reviewing estate accounts, questioning anything that looks wrong, and not agreeing to compromises lightly. Trustees are accountable to the Charity Commission for how legacy income is administered, and decisions should be documented.
Q What happens if a legacy is left to a charity that has changed name or merged?
Gifts to charities that have merged or changed name can still usually reach the intended cause, particularly where the merger has been recorded on the Charity Commission's Register of Mergers. However, problems do arise, especially with older wills. Keeping your registered name, number and any former names visible in legacy materials, and registering mergers properly, reduces the risk of gifts failing or being diverted.
Q How should a charity handle a disputed legacy?
Disputes can arise from family members contesting a will, ambiguous wording, or concerns about the testator's capacity. Charities must take these seriously, because trustees cannot simply give up charitable funds without good reason. The usual approach is to take early professional input, engage constructively with executors and other beneficiaries, and document the reasoning behind any settlement. The Charity Commission expects trustees to act proportionately rather than aggressively.
Q Does Gift Aid apply to gifts left in a will?
No. Gift Aid applies to donations made during a person's lifetime by a UK taxpayer, allowing the charity to reclaim basic rate tax on the gift. Legacies are handled through the inheritance tax system instead, where charitable gifts in wills are generally exempt from IHT. It is worth explaining both routes to supporters so they understand how lifetime giving and legacy giving fit together.
Sources
This guide is based on primary UK law and official guidance.
- Guidance · UK GovCharity Commission for England and Walesgov.uk
- Guidance · UK GovHMRC, Inheritance Tax and charitiesgov.uk
- Official SourceFundraising Regulator, Code of Fundraising Practicefundraisingregulator.org.uk
- LegislationCharities Act 2011legislation.gov.uk
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.