In the parable of the shrewd manager (Luke 16:1-15), Jesus encourages us to steward our worldly wealth just as carefully as our peers and yet with a different aim – that we will be ‘welcomed into eternal dwellings’ (Luke 16:9) and entrusted with the true riches of God (Luke 16:11) as we dwell with him forever.
The aim of this regular column is to help us to steward our charitable giving well by giving effectively and tax-efficiently.
When we consider making a gift to our favourite cause or topping up our Stewardship account, our default option is likely to be a cash gift. If you’re a regular reader of Share, you’re probably aware of the opportunity to boost your donation with Gift Aid or even reclaim higher or additional rate Gift Aid yourself. But have you ever considered giving assets rather than cash?
With low interest rates on cash savings and the increasing popularity of online trading, investing in stocks or shares seems to be a growing trend. If you work for a listed company, you might receive shares in your employer as part of your employment package. Others might receive stocks and shares in an inheritance.
Stewardship is able to accept gifts of shares listed on any of the major global stock exchanges. You can make your gift by a simple exchange of letters, in which you inform us of your gift and we ask you to arrange sale of the shares on our behalf. The cash proceeds will then be credited to your Giving Account.
If you give listed shares, units in an Authorised Unit Trust (AUT), or shares in an OEIC to Stewardship, you do not have to pay any capital gains tax (CGT) on the gift. In addition, you can deduct the market value of the shares from your taxable income for the relevant tax year, potentially reducing or even eliminating your income tax bill. Depending on your circumstances, this may be much more tax-efficient than selling the shares, paying CGT, making a cash gift to Stewardship from the net proceeds and then claiming Gift Aid.
If you don’t have enough taxable income to make full use of this relief in one tax year, you may instead wish to sell the shares, pay CGT, make a cash gift to Stewardship from the net proceeds (potentially spread over multiple tax years) and then claim Gift Aid. The pros and cons of these two strategies depend on your personal financial circumstances, so we would encourage you to talk to your tax adviser or visit www.gov.uk/donating-to-charity/donating-land-property-or-shares for more information.
If you’re a US-UK dual taxpayer, Stewardship America can accept your gift of listed shares and issue you with both US and UK tax receipts.
For business owners
If you’re a business owner wanting to set aside part of the capital value in your company for charitable purposes, we may be able to accept and hold non-voting shares in your private company. Please contact us to discuss the options further.
Land and property
If you’re planning to sell a holiday home, buy-to-let or plot of land and give the proceeds to Stewardship, you could instead give us the property itself. We will ask you to make your gift by a declaration of trust, then to sell the property on the open market on our behalf. The proceeds of sale, net of conveyancing expenses and estate agent fees, will be credited to your Giving Account.
As with a gift of listed shares, you do not have to pay any CGT on the gift. In addition, you can deduct the market value of the property from your taxable income for the relevant tax year.
Please bear in mind that income tax relief is only available if all co-owners want to give their entire beneficial interest to Stewardship.
For more information on how these reliefs would apply to your gift of property, please visit www.gov.uk/donating-to-charity/donating-land-property-or-shares or talk to your tax adviser.
To make a gift of shares or property to Stewardship, please contact the Philanthropy Services Team on 020 8418 8896 or [email protected].