What are the tax benefits?
Income tax relief
Since April 2000, individuals can get income tax relief, at their highest rate, for the full market value of shares on the date of transfer to The Children’s Society. In other words, you will not pay income tax on the equivalent amount of your annual income in the tax year that the gift is made and you can claim the tax relief on your self-assessment tax return.
This means that a higher rate taxpayer making a gift of £10,000 worth of shares to The Children’s Society could receive income tax relief of up to 40% of the full value, ie £4,000.
In order to make these savings all you need to do is:
- give the shares to a registered charity
- claim the tax relief on your tax return
- have paid the amount of tax deducted by the end of the tax year in which the gift is given - in other words the gift cannot give rise to a tax credit.
Capital gains tax relief
In addition to income tax relief there is also full relief from capital gains tax, which means that in the hands of The Children's Society the gift is worth more than if you had sold the shares yourself. The extent of the difference depends on how much capital gains tax you would have paid.
We advise that you consider taking professional advice to ensure that your gift to The Children's Society is structured in the most efficient manner as every donor's situation is different.