Tax and leaving money to religious orders in my will

Q&A: Dominic Coyle

Only 7 per cent actually follow through and leave something to a charity or charities in their will

Only 7 per cent actually follow through and leave something to a charity or charities in their will

 

I would like to leave money to religious institutions in my will while limiting the taxation due. How would I go about this? Spreading it over different orders etc?

Mr J.F., Galway

A lot of people talk about leaving money or specific bequests to charity, including to religious orders. But, when push comes to shove, far fewer actually end up doing so.

The charities are always looking to encourage such giving as many rely on such generosity to fund large parts of their work. Figures from Age Action say that close to three-quarters of the Irish population supports charities.

High as that is, I was somewhat surprised. I would have thought that most people in one way or another support local charities, even if they do not have financial resources to actually give them money or other assets.

The same Age Action figures indicate that 35 per cent of people – more than one in three – say when asked that they would happily leave a gift to charity once their family has been provided for in their will.

In the event, if Age Action is correct, only 7 per cent actually follow through and leave something to a charity or charities in their will.

To be fair to Revenue, and successive governments that have set down the rules, it is very easy to leave something to charity – religious institutions or otherwise.

You need to set down in your will precisely which order or orders you wish to receive the money. You can choose either to leave a specific amount or to leave the “residue”, which is what is left of the value of your estate after specific bequests have been paid to others named in the will, such as family or friends.

You do need to ensure that the orders are registered with the Revenue as acting for charitable purposes. For religious orders, I’d be surprised if any were not, but, for certainly, you should consult the full list of the registered charities here (https://iti.ms/2l4pGjt).

Once that is done, you have no worries – most particularly on the tax front.

Ireland does not apply capital acquisitions tax (inheritance tax) to charitable donations to registered charities, so anything you leave to one or more religious orders will not leave them (or your estate) with a tax bill – as long as the money is used for charitable purposes. But that is a matter for the recipient orders or institutions rather than you. All you can do is leave them the money and hope they maximise its potential by using it for charitable purposes.

On that basis, there is nothing stopping you leaving all your money to one religious order or institution, or spreading it among more than one. That’s entirely a decision for you but does not affect the tax position.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.

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