Gifts of quoted shares and land to charity

By Tolley
Personal_tax_img

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Gifts of quoted shares and land to charity
  • Meaning of ‘charity’
  • Qualifying investments
  • Date of disposal
  • Value of the asset
  • No double tax relief
  • Interaction with capital gains tax
  • Tainted charity donations
  • Disqualifying events for qualifying interests in land

Donations of quoted shares or land and buildings (rather than cash) to UK charities provide income tax relief for the taxpayer.

The mechanism for income tax relief is different from gifts of cash. Where qualifying non-cash assets are gifted, the market value of the asset is deducted from the taxpayer’s total income rather than adjusting his basic rate tax band. For details of tax relief on cash donations, see the Gifts of cash to charity guidance note.

Relief is claimed on the Tax Return by reporting the value of the asset in box 9 or 10 (depending on the type of asset gifted) on page TR4 of the Main Tax Return . There is no facility to report the donations on the Short Tax Return.

From 6 April 2012, taxpayers are able to get a tax reduction where they gift pre-eminent objects of national importance to the State. This is referred to in the legislation as ‘gifts to the nation’ and is also known as the ‘cultural gifts scheme’. The individual receives a tax reduction (against the combined income tax and capital gains tax liability) which is equal to 30% of the market value of the object. Note that whilst this is not a donation direct to charity, it is a philanthropic gift and the State will lend the items to charitable institutions such as museums. For more details, see Simon’s Taxes C1.417 (subscription sensitive).

FA 2012, Sch 14

Donations to charity are not included in the cap on unlimited income tax reliefs which applies from 6 April 2013. See the Cap on unlimited income tax reliefs guidance note for more information on the cap.

Meaning of ‘charity’
Donations from 6 April 2012

The definition of charity was significantly altered with effect from 6 April 2012, extending UK income tax reliefs to charities based

More on Charitable giving: