Gifting cash and assets to charity

Produced by Tolley in association with Speechly Bircham LLP

The following Trusts and Inheritance Tax guidance note Produced by Tolley in association with Speechly Bircham LLP provides comprehensive and up to date tax information covering:

  • Gifting cash and assets to charity
  • Gift aid
  • Record keeping
  • Planning issues for charities
  • Payroll giving
  • Cash gifts by companies
  • Gifts of shares, securities and land
  • Gift of other non-cash assets
  • Retail giving scheme
  • Interest-free loans to charities
  • More...

There are a number of tax reliefs available for gifts to charities. This note sets out the UK tax treatment of gifts to organisations established in part of the UK with purposes regarded as charitable under the law of England and Wales. See the Foreign charitable trusts and other foreign charities guidance note for information on gifts to other entities of a charitable nature.

Gift aid

Gift aid is a way for charities or community amateur sports clubs to increase the value of monetary gifts from UK taxpayers by claiming back the basic rate of tax paid by the donor.

See the Gifts of cash guidance note in the Personal Tax module for details of the conditions for a qualifying donation and the tax relief available to the individual.

The 2012 Budget confirmed key announcements relating to gift aid, including:

  1. an increase of the gift aid benefit limit from £500 to £2,500, subject to the existing 5% limit. HMRC’s detailed guidance note outlines that a benefit is “any item or service provided by the charity or a third party to the donor or a person connected with the donor and which is associated with the donation”

  2. from April 2013, the Gift Aid Small Donations Scheme to allow charities to claim gift aid on up to £5,000 of small donations of up to £20 without the need for Gift Aid declarations

  3. the introduction of an online system for charities to claim gift aid, and as a first step, the publication of 'intelligent' forms (which contain automatic checks) for charities to use to apply for and claim tax reliefs

Record keeping

A charity must maintain evidence to satisfy HMRC that a payment has been made and by whom. For full details of the records to be kept by a charity and the format in which the records may be stored, see the HMRC website.

Planning issues for charities

Charities should encourage all donors to make use of gift aid. If a charity

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