UK Taxpayers Urged To Save Tax Through Charitable Giving

by Robert Lee, Tax-News.com, London

10 January 2005

With the January 31 deadline for self-assessment filing in the UK fast approaching, taxpayers are reminded that they are able to claim a double tax relief through the donation of stocks and shares to charity.

As the Charities Aid Foundation (CAF) points out, donated stocks and shares are not only exempt from Capital Gains Tax, in the case of quoted shares they can also reduce taxable income by the value of the shares gifted.

By opening a CAF Charities Account - a tax-efficient individual account administered by CAF and a charity in its own right - clients can make regular deposits of shares or Gift Aid payments and use a ‘charity cheque book’ and CharityCard to make donations to their favourite good causes whenever they choose.

In addition, by including details of Gift Aid donations on their self-assessment forms, higher rate tax-payers are able to reclaim the marginal rate of tax for themselves.

Moreover, the CAF saves the charities the administrative burden of claiming back the tax from the Treasury.

John Thurley, Head of Charity Account Services explained: “If half the current £5 billion given to charity non tax-efficiently was converted, this would double the current level of tax-efficient giving and attract a possible half a billion in tax relief.”

According to Mr Thurley, at present only one in three donations is tax-efficient.

Large donors are also able to use the CAF’s other vehicles for tax-efficient donations, including through a Trust Service enabling donors to provide ongoing contributions even after their death.

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