As a charity, we rely a lot on voluntary donations to enable us to continue with the restoration of the Montgomery Canal. Some people choose to make a single donation. Others make regular monthly payments – which enable us to plan ahead knowing what our income will be.
The restoration has always had support from fantastic volunteers. But we still need to pay for materials and the hire of equipment.
Some people are kind enough to leave a legacy for the Montgomery Canal in their Will. Such sums can be substantial and can lead to a reduction in Inheritance Tax bills. As it is hard to get money from public sources and when such funders have extra topics they want covered, legacies are especially valuable as they can be spent directly on restoration works. In some cases, legacies can help to provide the match funding which public funders often seek.
When making a Will, there are different types of gift you can make:
- A specific sum of money – a lump sum
- The whole – or a percentage – of your assets, after other gifts and expenses have been paid
- A particular item, such as jewellery, shares or a piece of land.
If you consider making a gift in your Will, we recommend you speak to your solicitor or other adviser to ensure the wording is right so that your gift is used as you intend.
Your legacy can reduce the tax bill
A legacy for the Montgomery Canal will be exempt from Inheritance Tax but if it is more than 10% of the net estate the rate of tax on the whole estate is reduced by 10%.
Let’s look at the example of Alice whose estate is valued at £500,000 after funeral expenses and other liabilities. The tax-free nil-rate band of £325,000 leaves a taxable balance of £175,000, taxed at 40% – £70,000 – meaning Alice’s heirs will receive £430,000.
Fortunately, Alice’s Will included a charity gift of £20,000 for the Montgomery Canal. As the gift is more than 10% of that taxable balance of £175,000 the calculations change. No tax is paid on the nil-rate band or the charity legacy, leaving a taxable balance of £155,00: this is taxed at 36% – £55,800 – leaving £424,200 for Alice’s heirs. In other words the £20,000 gift to charity has cost the heirs £5,800.
It’s not too late to leave a legacy for the Montgomery Canal
If the Will did not include a charity gift but Alice’s heirs would like to benefit the Montgomery Canal they can transfer some or all of the inheritance by a written instruction to the executors of the Will. This is known as a Deed of Arrangement and means the estate will be dealt with as if the Will had included the change and the tax reduction will apply in the same way. Further information can be obtained from – and gifts should be payable to:
Montgomery Waterway Restoration Trust (charity number 510488)
26 Bentley Drive
Oswestry
Shropshire
SY11 1TQ
Or email contact@montgomerywrtrust.uk
If you would like to make a donation right now, please visit this page.
