COVID-19: Stewardship is operating as usual and we are aiming to provide as close to normal service as we can.
Please click here for regular updates

Tax effective giving - it's so much more than just Gift Aid

By Kevin Russell | 3 April 2015

There are a number of ways of giving to charity where the taxman will also dig into his pocket to help you.

 

Here, is a summary of tax efficient giving methods and details of helpful Stewardship Briefing Papers that go into more depth, including how best to use the various reliefs:

 

Gift Aid

Simple cash donations, attracting basic and higher rate tax relief. By signing a form (a declaration to the charity that you will have paid enough tax to cover the tax that they will reclaim from HMRC), your gift effectively becomes tax free.

 

Giving Services Team: 020 8502 8560, or stewardship.org.uk/giving/give

 

Gifts of quoted shares and securities

The current market value of the shares gifted to charity is deductible from your taxable income and there is no capital gains tax on any increase in value since you acquired them. Stewardship’s Gold Team will be delighted to tell you more and can help you with the practicalities.

 

Stewardship Gold Team: 020 8418 8896, or stewardship.org.uk/giving/gold-account

 

Gifts of land and property

As with gifts of shares, the current market value is deductible from your taxable income and there is no capital gains tax. More suitable for donors that have inherited property, or have several properties. The Gold Team will be happy to advise further.

 

Stewardship Gold Team: 020 8418 8896 or stewardship.org.uk/giving/gold-account

 

Legacies

Giving to charity in your Will is exempt from Inheritance Tax and, where the amount given exceeds a 10% threshold, the rate of Inheritance Tax on the rest of the estate will be discounted. And Stewardship has a Legacy Account that enables your relatives to use your legacy to continue your giving after your death.

 

Giving Services Team: 020 8502 8560, stewardship.org.uk/giving/legacies

 

Deeds of Variation

If you are already a personal beneficiary in someone’s Will but wish to divert some of your legacy to charity, you can do so, using a Deed of Variation, completed within two years of the death. This will have the effect as if the deceased had put the changes into their original Will, and it may save on Inheritance Tax too!

 

Stewardship Gold Team: 020 8418 8896

 

Payroll Giving

With Payroll Giving, your gifts to charity are deducted from your pay by your employer, gaining full tax relief at source. Your employer sends your contributions to an authorised Payroll Giving Agency (like Stewardship) and may add their own matched gift. Your employer needs to have, or to set up, a Payroll Giving Scheme.

 

Stewardship Payroll Giving Team: 020 8502 8560, or stewardship.org.uk/giving/payroll-giving-1

 

Gift Aid Small Donations Scheme

Although not technically Gift Aid, the GASDS allows charities that claim Gift Aid proper to also claim a top up payment, rather like Gift Aid, on cash donations of up to £5,000 per year, possibly more if the church or charity collects cash donations in a ‘community building’. It is expected that the £5,000 limit will be increased to £8,000 from April 2016.

 

Detailed further information can be found in the two Briefing Papers below.

 

Stewardship Briefing Papers

The following papers provide further useful information on each of the above topics. They are available free from stewardship.org.uk/resources/briefing-papers

 

  • It’s not what you give, it’s the way that you give it

Covers all of the above topics

  • Where there’s a Will, there’s a way

Covers Wills and Will writing: the Biblical and ethical perspective, practical and legal considerations, tax considerations (including Deeds of Variation, Inheritance Tax exemptions and our Legacy Account)

  • The Gift Aid Small Donations Scheme – A practical guide

An overview of the Scheme and practical guidance, including a template offerings record sheet for churches

  • The Gift Aid Small Donations Scheme – A comprehensive guide

A more detailed guide to the rules including detailed consideration of the ‘community buildings’ rules

 

Guidance on tax reliefs for giving, for higher earners:

 

  • Withdrawal of Personal Allowances for high earners
  • Charitable Giving and the 45% income tax rate

 

Posted by Kevin Russell

Our Legal Eagle guru and Stewardship's Technical Director, Kevin constantly has his finger on the pulse of all things tax and charity law-related. His briefing papers for charities, churches and individuals are an invaluable resource on everything from VAT to Gift Aid. 

comments:

There are currently no comments on this post

leave a comment:

Your comment will have to be approved by a site administrator before it is shown on the site so please be patient.