The Spring 2023 budget includes changes that will have an impact on charitable giving.
In this blog I unpack the implications of two developments and how using our Donor Advised Fund can help.
Brexit hits home for cross-border philanthropy
The first key change is that EU and EEA charities are no longer eligible to be recognised as a charity for UK tax purposes. Those charities already recognised by HMRC have been given a one year transition period until April 2024.
For those charities affected, this means direct donations from UK supporters will no longer be eligible for UK tax reliefs such as Gift Aid, income tax relief on share gifts and Inheritance Tax exemption. However, by partnering with a UK donor advised fund such as Stewardship's, you can still receive support boosted by UK tax relief.
If you have made a will leaving a charitable legacy to an EU/EEA charity in the expectation that this would qualify for UK Inheritance Tax exemption, ask your adviser for help in reviewing this. You could instead leave a tax-exempt legacy to Stewardship, together with a letter of wishes asking us to support the EU/EEA charity. We work with our friends at TrustBridge Global Foundation to facilitate these cross-border gifts.
Spring Budget 2023 and pension tapering
The Spring 2023 budget increased the annual allowance for pension contributions from £40k to £60k and the adjusted income threshold from £240k to £260k. If regardless of these changes you are still affected by pension tapering, one option to consider is charitable giving. However, while gifts of shares or property, or payroll gifts do reduce 'threshold income' under Section 23 ITA 2007, Gift-Aided cash gifts do not. We can facilitate gifts of shares and property and are registered to receive funds from the main payroll giving agencies.
Next steps
If you are affected by these changes and would like further information, please get in touch with the Philanthropy Services team.
Impact
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Rachel Steeden
Rachel is a solicitor with 17 years’ experience advising private clients and charities. She enjoys working closely with clients and their advisers to help donors make complex gifts effectively and tax-efficiently.
She is a member of the Charity Law Association, STEP Special Interest Group for Philanthropy, Lawyers in Charities and Lawyers’ Christian Fellowship. She is also on CityWealth's prestigious Top 10 Philanthropy Advisors 2024 list.
Rachel and her husband Derek lead a Bible study group at their church in central London.
They’re passionate about Church Planting in the UK and overseas, Bible translation and The Local Church.
