Article Summary
This guidance note provides an overview of the tax reliefs available in the UK for gifts of cash and assets to charities. It outlines the gift aid scheme which allows charities to claim back basic rate tax on monetary donations. Payroll giving is also explained, where employees can make regular pre-tax deductions directly from their salary. Companies can make gifts of money and obtain corporation tax relief. Since 2002, gift aid relief has been extended to certain gifts of shares, securities and land. While no capital gains tax arises on gifts of assets to charities, it may be better to sell the asset and donate the proceeds. Retail gift aid schemes allow charity shops to claim gift aid on donated items they sell. Tax reliefs are also available for gifts in kind from businesses, and gifts made on death are exempt from inheritance tax. Care needs to be taken with interest-free loans and 'double dip' arrangements to obtain both inheritance tax and income tax reliefs. Overall, this is a helpful guide for tax professionals to understand the range of UK tax reliefs available for charitable giving.