Inheritance Tax and other FAQs
Two are better than one, because they have a good return for their work. If one falls down, his friend can help him up.
Ecclesiastes 4:9-10
Here are the answers to some frequently asked questions regarding gifts in wills to the Church of England. They provide basic information, sometimes about fairly complex topics.
What is Inheritance Tax?
Inheritance Tax is only due if your estate (including any assets held in trust and gifts made within seven years of death) is valued over the current Inheritance Tax threshold £325,000 in 2013-14.
The tax is payable at 40 per cent on the amount over this threshold or 36 per cent if the estate qualifies for a reduced rate as a result of a larger 10% charitable donation.
All charitable gifts (including gifts in wills to the Church of England) are exempt of inheritance tax. For more information visit HMRC.
Other frequently asked questions
What is the church is part of a benefice?
Even if the church is part of a benefice, there will still be a Parochial Church Council (PCC) of the parish and this is always the proper receiving body of a legacy. The will clause should include the full name, address and post code of the named church as well as the name of the Parochial Church Council.
Do I need a charity number to leave a gift to my local church?
No. The Church of England is itself not a legal entity and has a complex structure however all 16,000 of its churches are excepted from registration with the Charity Commission. Churches whose annual income exceeds £100,000 will be registered with the Charity Commission and have individual Charity Numbers.
- All Church of England Churches have charitable status even if they do not have a Registered Charity Number.
However, some do have registered charity numbers.
- Churches whose annual income exceeds £100,000 will be registered with the Charity Commission and have individual Charity Numbers.
- If you are unsure whether the church does or does not have a charity number, please contact Eleanor Stead who can follow up the enquiry on your behalf.
How often should I update my Will?
Solicitors recommend that your Will should be updated any time your financial or family circumstances change. It is always wise, even if there are not any significant changes in your circumstances to periodically review this important document ‘every five years’.
What is a Codicil?
A Codicil can make amendments to an existing Will, by revoking and adding in new clauses. It is recommended that only two to three simple changes are made via Codicil before a new Will is considered instead. Your legal advisor will be able to advise on whether a new Will is best or whether a change to your existing Will can be dealt by way of a Codicil. Click here to view our online Codicil document
How much does it cost to write a Will?
Many people worry about the expense of writing a Will but it’s a good investment in your family’s future. A simple Will can cost around £200 plus VAT and a mirror Will (for couples) can be written for around £300 plus VAT. Comparative costs can be obtained easily by phoning a few solicitors in your area.
Can a PCC claim Gift Aid on a Legacy?
No. All charitable gifts (including gifts in wills left to the Church of England) are exempt from Inheritance Tax. Therefore the gift is already exempt from any tax that would have been charged on the amount of the gift.
How should the church receive payment?
Pecuniary legacies tend to be paid by the executors within a few months of the death. The executor will usually send a cheque which should be made out to the Parochial Church Council or bank transfer for the correct amount. It is helpful if a covering letter (FAO: Vicar / Churchwarden / Treasurer) confirming the deceased’s name, address and any other helpful information is included.
