If you are a UK taxpayer there are a number of ways to give tax efficiently. Donors can take advantage of tax incentives designed to encourage philanthropy.
If you are considering making a significant gift, we would recommend you seek the advice of a professional advisor.
A summary of key information for individuals is below.
Gift Aid
If you are a UK taxpayer, Gift Aid enables charities you support to get extra money on your donation without it costing you a penny more.
Gift Aid allows the foundation to increase the value of your donation by 25% (current rate) at no extra cost to you.
Your donation is treated as if basic rate income tax had been deducted: charities can therefore reclaim that tax from HM Revenue & Customs (HMRC).
For example, on your donation of £10,000, we can claim £2,500 in Gift Aid, meaning your gift total will be £12,500.
Applicable to: Foundation memberships and single donations.
Gifts to a charity
Legacy gifts
If your estate is liable to Inheritance Tax you could choose to leave money to charity to reduce the overall amount of tax due from your estate. You could either leave a fixed sum (known as a ‘Pecuniary Legacy’) or part or all of your estate once other gifts have been distributed (known as a ‘Residuary Legacy’). You can do this through your will, or simply by a declaration to the executors giving instructions as to how, and to which charity, your legacy is to be distributed. Your personal accountant or solicitor will be able to advise on the best option for you.
In addition, if at least 10% of the taxable value of your estate is left to charity, the inheritance tax on the remainder of your estate is automatically reduced from 40% to 36%.
Tax relief can also be granted by using a Deed of Variation. A Deed of Variation can be executed within two years of a death and provide significant savings in inheritance tax by increasing the gift left to charity.
Applicable to: Leave a gift in your will
Gifts of assets: land, buildings, shares etc
Individuals can get tax relief on gifts to charity of certain listed shares, securities and other investments. You can get income tax relief, in addition to the capital gains tax relief on gifts of assets to charity. The tax relief applies if you give, or sell at less than market value, any qualifying investments to a UK charity.
If you would like to leave a gift to the Foundation, please contact our Development Director, Tamara Sherston-Baker on 01566 779333 Ext 203 or tamara@cornwallcommunityfoundation.com
Leave a gift
Tamara Sherston-Baker
Development Director
Other tax-efficient giving options
Payroll giving
An unlimited amount can be contributed to charity via payroll giving. It costs you less to give because your donation is given to charity from your gross salary before any tax is taken off – so you don’t pay tax on it.
Self-Assessment giving
If you complete a Self-Assessment tax return and are entitled to a tax refund, you can choose to have all or part of the repayment sent directly to a charity of your choice. This is called ‘Self Assessment Giving’ or ‘SA Donate’. You can also ask the repayment to be made as a Gift Aid donation. HM Revenue & Customs (HMRC) sends your refund (plus any Gift Aid tax repayment) directly to the charity by electronic transfer.
Tax relief for higher and additional rate taxpayers
If you pay tax at the higher rate, you can claim back the difference between the higher rates of tax (40% or 45%) and the basic rate (20%) on the total value of the donation.
For example, if you pay the 40% rate, a donation of £10,000 allows you to recover £2,500, so the donation costs you only £7,500 net, but the Community Foundation receives £12,500. If you pay the 45% rate, a donation of £10,000 allows you to recover £3,125, so the donation costs you only £6,875 net, but we receive £12,500.
