You make the gift out of your taxed income and the charity benefits by claiming back basic rate tax on the value of the gift. Higher rate taxpayers can claim extra tax relief of 20%.
Although the basic rate is now 20%, charities receive tax repayments at the former 22% rate on donations made up to 5 April 2011.
- You can elect for donations made in 2008/09 to be treated for tax purposes as if you had made them in 2007/08. This will benefit you if you were a higher rate taxpayer in 2007/08, but not in 2008/09. The election must be made in writing at the same time as, or before, filing your 2007/08 tax return and this must not be later than 31 January 2009.
- You can obtain both income tax and CGT relief on gifts to charities of shares listed on the stock market and certain other investments.
- Gifts to charity are free of IHT, so remembering a charity in your will can reduce the total amount of IHT to be paid on your estate.
Useful link: www.hmrc.gov.uk/menus/charity.htm – information about charitable giving.
Planning point: Don’t forget that it is very tax-efficient to give to charity.Last Updated
