Share giving
Since April 2000 there have been generous tax incentives for both individuals and companies to give shares to charity. This means making a gift of shares to the NDCS is one of the most tax efficient ways to give.
The gift of shares will be free from capital gains tax and the donor can claim income tax relief, no matter what the total market value of the shares are.
- Income tax relief
- Capital gains tax relief
- How you can donate shares?
- Is share value affected?
- Other ways to donate shares
Income tax relief
The relief from income tax is available for the full market value of the shares on the date of disposal. 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. This means that a higher rate taxpayer making gift of £1,000 worth of shares to a registered charity will receive income tax relief of 40 percent of the full value, ie £400. 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)
In order to qualify for the relief, the shares must be listed or dealt on a recognised stock exchange.
TopCapital 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 NDCS the gift is worth more than if you had sold shares yourself. The extent of the difference depends on how much capital gains tax you would have paid. Every donor's situation may be different and we advise consultation with a tax adviser/accountant to determine your own situation.
How you can donate shares?
- You arrange disposal of your shares with the proceeds being donated to the NDCS.
- Shares can be transferred to the NDCS upon completion of a transfer documentation completed by yourself and returned to us with the share certificate.
Is share value affected?
In our experience some of our donors who are company directors have been concerned about the effect that an immediate sale of a significant number of their shares by the NDCS would have on the share value.
1. The first way is for you to gift the shares to us in a controlled manner over a number of years. This may be advisable for personal tax reasons as well, because you need to ensure that you have enough taxable income in the year that you make the donation to offset against the market value of your gift.
2. The second way is for you to send us the share certificate in the name of the NDCS and attach a letter with conditions as to when we can sell the shares. We will then simply hold onto them until the date you specify.
Other ways to donate shares
CAF (The Charities Aid Foundation) provides a range of services to facilitate gifts of share. Please see the CAF website for more information.
ShareGift: If you only have a few shares, you may want to consider sending them to the charity ShareGift (registered charity 1052686). ShareGift specialises in accepting small holdings of shares with low values, which would normally be uneconomic to be sold. They aggregate the shares, sell them when they have collected enough and distribute the ultimate proceeds to other UK charities. For further information please visit www.sharegift.org
To find out more, please contact the Individual Giving team on 020 7490 8656 or fundraising@ndcs.org.uk
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