Payroll Giving

This allows an employee to gift to charity the sums being deducted from their salary, thereby obtaining tax relief as they earn.

For example, for a basic rate tax payer a £10 donation will cost £8 and for a higher rate tax payer the cost will be £6.

The scheme is inexpensive and easy to set up.

Gifts of Shares, Securities and Land to Charities

Income tax relief can also be obtained for the donation of shares, securities and land provided that the asset gifted is regarded as a 'qualifying investment'.

A qualifying investment includes:

1. Shares or securities listed on a recognized stock exchange in the UK
2. Unite in an authorized unit trust
3. Interest in an offshore fund
4. UK freehold and leasehold land

The amount of the relief is given only against taxable income and not chargeable gains. The amount of the relief is valued by reference to the market value of the investment at the date of donation.

Cash Gifts by Companies

Companies are able to obtain corporation tax relief on their cash gifts to charities. The gift is deducted by making a payment as a charge on the companies income liable to corporation tax. The company will need to check that its Memorandum and Articles of Association permit the company to make the proposed charitable gift.

Gift of Trading Stock

It is possible for a person carrying on a trade or profession to provide a charity with trading stock without charge or substantially discounted. Such a gift may be eligible for tax relief, however there could be a VAT charge equal to the original cost of purchase.

Donation of Services

The salary of an employee seconded to a charity will be regarded as an allowable trading expense for the donor.

Legacies

Where the beneficiaries of an Estate include charities it should be possible to avoid Capital Gains Tax. The general principle is that the personal representatives would transfer assets to the charity in advance to their sale. The charity could then dispose of the assets and achieve a capital gain tax free.