Leaving a legacy to Eton is a popular way in which your support will help future generations to enjoy the full and varied opportunities available at College.
Bequeathing a legacy is not only a propitious way of giving back to the school but there are also benefits to the donor too as if you’re a UK tax payer your estate may also benefit from reduced Inheritance Tax.
The Henry VI Society was established to thank those who have generously pledged, or given, such a legacy to Eton College. Chaired by Michael Constantinidi (JDU, DCW 46) the Society holds an annual lunch, hosted by the Provost, and invites members to events such as the school plays, carol concerts and various sporting matches throughout the year.
We understand that leaving a legacy to Eton is a serious undertaking and if you have any questions, or would like to talk it through, please call the Director of Development Rachael Henshilwood on 01753 441627
Our next event will be:-
30th November 2014: Mince Pies and Carols at Eton College Chapel
If you have made a provision in your Will for Eton and are a member of the Henry VI Society, invitations will be sent to you early Autumn. We are always keen to talk to you about the Henry VI Society, please contact the Development Office at firstname.lastname@example.org or phone 01753 671340 so that you may be added to the membership.
Leaving a Legacy
Whether writing your Will for the first time or amending it with a Codicil, leaving a bequest to Eton is straightforward, although legal advice should be taken. The suggested instruction letter to your solicitor may be helpful.
Eton is a charity registered with the Inland Revenue. Consequently all bequests to Eton are exempt from inheritance tax. From April 2012 there will be a reduced rate of inheritance tax of 36% for estates leaving 10% or more of their legacy to charity.
Please click on the following links if you would like to download a form:
(HMRC methodology – one estate component)
Donor died June 2012 leaving an estate valued at £750,000 after the deduction of liabilities. He left £50,000 to Eton in his will.
Step 1 - deduct the £50,000 Eton donation from £750,000 (the net estate). This leaves a figure of £700,000.
Step 2 - deduct £325,000 (Inheritance Tax nil rate band) from £700,000. This leaves a figure of £375,000.
Step 3 - add £50,000 (the value of the Eton donation) back to £375,000. This gives a figure of £425,000 - the ‘baseline amount’.10 per cent of the estate of £425,000 is £42,500. This estate qualifies for the reduced rate of Inheritance Tax because the charitable donation of £50,000 is more than 10 per cent of the ‘baseline amount’.
The Inheritance Tax payable will be £135,000 (36% of £375,000) compared to £170,000 (40% of £425,000) if there had been no charitable legacy. The net cost of the £50,000 legacy to the non-charitable beneficiaries of the estate is £15,000. Because of the intricacies of the property ownership and estate planning it is advisable to seek professional advice.
There are six types of bequests:
1. Residuary Bequests: This is an attractive method as it maintains a stated percentage among all residuary legatees, thus protecting all of them equally against a fall in the value of your residuary estate or enabling them all to enjoy any increase in its value. The value of the residuary estate is the value of your taxable estate after specific bequests and inheritance tax which is retrospectively adjusted downwards to take into account that part of the residue bequeathed to Eton.
2. Inflation Linked Pecuniary Bequests: This is a simple instruction in your Will to make a legacy to Eton of a specified sum of money the amount of which is linked to inflation, thereby maintaining the original value of the gift over the years.
3. Specific Bequests: This is a gift of property such as real estate, securities, jewellery and works of art that have monetary value. In many instances Eton will wish to realise this monetary value of the property bequeathed. If donors have other intentions it is advisable to raise these with Eton.
4. Reversionary Bequests: Identified assets are left to Eton subject to the right of nominated beneficiaries to use them during his lifetime. The assets form part of your estate and may be subject to inheritance tax on your death but not on death of the beneficiaries. It is advisable this sort of bequest with Eton.
5. Conditional Legacy: It is usual for a Will to provide that, if none of the beneficiaries survives you, your estate will pass to one or more named ‘long-stop’ beneficiaries which could include charities such as Eton.
6. Alternatively Secured Pension (ASP): An individual can leave funds forming part of an alternatively secured pension to his spouse free of inheritance tax (IHT). However, on the death of the surviving spouse, the funds remaining in the ASP suffer not only IHT but in certain circumstances additional taxes of up to 82% of the value of the fund. However, if you were to bequeath such funds to a charity such as Eton, they would not be subject to these taxes.
If you have a specific thought as to the purpose of your legacy, please contact us and we would be delighted to explore a variety of options with you.