Tax and your donation
As a UK tax payer, there are several schemes that make giving easy and very rewarding.
Gift Aid is a simple scheme that enables charities to claim an additional 25p from every £1 donated by UK taxpayers.
- Visit www.hmrc.gov.uk for expert help with all your Gift Aid questions.
Higher Rate Tax
If you are a higher rate taxpayer, you can claim the difference between the higher rate of tax at 40 per cent and the new basic rate of tax at 20 per cent on your gift to us.
For example, if you make a gift of £1,000, you can reclaim higher rate relief of £250 (£1,000 x 200/800) via your Self Assessment tax return. You can also Gift Aid your tax rebate making it worth even more - a donation of £1,000 could be worth over £1,600 to us under this scheme.
Put simply, you can claim tax relief equal to the market value of the shares on the day you make the gift, together with any associated costs such as brokers’ fees. The relief is set against your income tax for the year. For example, if you give a charity £1,000 worth of shares and you are a higher rate income tax payer, you will pay £400 less in income tax that year.
Additionally, you will not have to pay any capital gains tax (CGT) on any increase in the value of the shares since you acquired them.
There is a similar scheme for gifts of land or property.
More recent schemes that have also been created include:
Inheritance Tax scheme: If a supporter leaves 10 per cent of his/her estate to charity, the estate benefits from a 10 per cent reduction in the rate of Inheritance Tax (36 per cent instead of 40 per cent).
Cultural Gifts Scheme: Under this scheme, the owner donates 'pre-eminent' items to the nation to be placed in the care of a nominated organisation. In return the donor receives a tax rebate equivalent to 30 per cent of the agreed value of the items.