For many people, charitable giving is not just about leaving a gift in a will, but about making an impact during their lifetime and having a hand in shaping how that gift is used.
Even where most of a person’s wealth is tied up in property, investments, or business shares rather than ready cash, there are ways to plan giving so it benefits both chosen causes and the estate.
From an inheritance tax (IHT) perspective, charitable giving is powerful. Gifts to UK-registered charities are exempt from IHT, whether made during a person’s lifetime or upon their death.
Where at least 10% of your net estate is left to charity on death, the IHT rate on the rest of their taxable estate falls from 40% to 36%.
Reducing the value of an estate during lifetime may also help ensure that all IHT allowances, such as the residence nil rate band, remain available.
An increasingly popular route is the creation of a lifetime charitable trust. This allows for assets ring-fenced for charitable purposes in the present, as opposed to when a will is read.
Cash, investments, or even shares in a family business can be transferred into the trust.
Crucially, you can remain actively involved. You might be a trustee yourself, appoint family members or advisers alongside you, and set clear priorities for the causes you wish to support – while keeping flexibility to respond to new needs over time.
This approach allows you to see the real-world impact of your giving and, if you wish, involve the next generation in decision-making.
With changes to the UK IHT landscape anticipated in 2026, lifetime transfers into charitable structures could become even more appealing, particularly for estates made up of illiquid assets.
For those who want the benefits of a charitable trust without the administrative demands, a Donor Advised Fund can be a compelling alternative. Individuals make a gift into the fund (which is itself a registered charity) and receive immediate tax relief, then recommend how and when the fund distributes money to causes they care about.
In Northern Ireland, the Community Foundation for Northern Ireland enables donors to support local causes through tailored grant-making and, in some cases, matching donations.
Such organisations handle the compliance and management, allowing you to focus on the joy of giving.
Whether through a charitable trust you help to run, a DAF, or strategic gifts via your will, estate planning can enable you to shape your giving, be part of its impact, and ensure your assets support the causes you care about - during your lifetime and beyond.
- Barry McDonough is an associate, family owned business and private client, at Arthur Cox Northern Ireland
