Charitable Giving
MAY 2010
We have been going through a recession, yet the 100 wealthiest people in Britain gave £2.493bn to charitable causes last year (according to The Sunday Times Giving List published on 28th April 2010). The Charities Aid Foundation has also reported a 250% rise in the value of donations in the first quarter of 2010 as compared with the same quarter last year.
Against this backdrop there has been a cautionary tale playing itself out in the High Court. The case concerns the Will of George Mason who wanted to share his estate between his brother, two friends and the RSPCA. Unfortunately, the drafting of the Will left a lot to be desired. It was unclear whether one gift was meant to be deducted from the other or whether the two were to be added together, which would reduce the amount passing to the RSPCA as well as giving rise to a tax bill. The RSPCA differed with the Executors on its interpretation and took the matter to Court. They lost in the High Court and the matter is now on the way to the Court of Appeal.
When dividing your estate between beneficiaries liable to pay inheritance tax and beneficiaries such as charities which are not liable to tax, it is very important to draft the legacies carefully and to make clear how the burden of tax is to be borne. This case has already given rise to legal fees which may yet have to be borne by the Estate and which are likely to be a greater burden than any inheritance tax bill. There has also been a great deal of unfavourable publicity attaching to the RSPCA which may result in a decrease in charitable legacies even if their interpretation is upheld on appeal.
The moral of the story? Do not allow your generosity to beneficiaries to be marred by an inexpertly drawn Will.
If you would like any other information about the issues raised in this article please contact Clare Jeffries or any other member of Goodman Derrick LLPs private client team on 0207 404 0606.
This guide is for general information and interest only and should not be relied upon as providing specific legal advice.
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