Supporting good causes in both the local and wider community is important to us at Hunter, Aitkenhead & Walker, click here to read more about what we do, how we do it and why it means so much to us.
In 2016, UK donors put £9.7 billion into good causes. (Source: Caf Online)
As a nation, the UK population tend to be very generous where charities and good causes are concerned. And that can only be a good thing, as it:
- Gives you a warm fuzzy feeling
- Helps people, animals and causes you care about
- Enables the charity to continue to offer their services
But, could you be giving money in a smarter way, which helps yourself as well as helping those in need?
Potentially. While there’s no right or wrong way to be charitable, there are methods which can improve your financial position whilst allowing you to give the same amount you would’ve to start with.
1. Tick the Gift Aid box
It may not directly benefit your wallet, but by ticking the ‘Gift Aid’ box when you donate you enable the charity to reclaim any tax they would otherwise pay on your donation. This means that more of your money is used to help combat issues you care about, rather than lining the taxman’s pockets.
2. Set a budget and payment plan
Giving money to charity might not feel like a frivolous expense, but if you give too much away, at the cost of being able to afford your regular living costs, it is time to reel it in. Set yourself a monthly budget and use Direct Debits to make sure that your favourite causes benefit on a regular basis.
3. Donating monthly rather than ad-hoc
Making a regular contribution serves two purposes. Firstly, your chosen charities benefit from a known funding stream, which can be vital to the survival of many smaller or local charities who see an influx of generosity during major holidays but may struggle for income at other times of year.
Secondly, this allows you to put a budget in place and stick to your monthly charity allowance. As nice as it is to donate to charity anytime you see an advert or collection tin, it can be easy to lose track of how much you are giving away when you do that.
4. Give charitable gifts to reduce your family’s IHT bill
When you die, your family will have to pay Inheritance Tax (IHT) on any value of your estate which is over £325,000 or £650,000 for married couples. When planning how much you will leave behind, you are able to make gifts to charities without incurring tax. Often this can be a good way to both lower the value of an estate, as well as making sure that the charities receive as much as possible, without losing value in tax.
5. Leave a legacy in your will
Including charitable donations in your will means that the charity receives the amount you intend for them. It is a great way to make a final donation and know that you will be able to have a positive effect after you die.
However, more than 60% of UK adults do not have a will in place (source: UnBiased), which means that, should they die before writing one, all their money and belongings will be allocated according to the laws of intestacy, which do not have any provisions for charitable giving.
If you are among the 31 million people with no will, it’s time to start the process. Get in touch for help.
How can financial planning help?
Financial planning makes sure that your affairs are organised as tax-efficiently as possible, enabling you to leave more of your money to family and important causes, rather than the government.
To discuss how you can give to charities in the most effective and efficient way, please get in touch with us on 01664 77 88 99.