What are the benefits of giving shares?
Donating shares is one of the most tax-effective ways to give to charity. This is because you can not only claim income tax relief on the value of your gift, but also avoid capital gains tax. Moreover, it applies not only to outright donations, but also if you choose to sell shares to charity for less than their market value. You can even claim the extra tax benefits if you sell the shares and donate the proceeds, but only if the charity has asked you to do so in preference to receiving the shares themselves, and where this has been confirmed in writing.
Similar considerations apply to gifts of land and property.
How does the tax relief work?
Below are some examples. If, for instance, you pay tax at the higher rate (currently 40%), it will only cost you £600 to make a donation of shares worth £1,000 to the Church Urban Fund.
|
Market value of shares |
Amount of tax relief you can claim |
Cost to you |
Value to the Church Urban Fund |
|
Basic rate
tax payer (22%) |
£1,000 |
£220 |
£780 |
£1,000 |
|
Higher rate tax payer (40%) |
£1,000 |
£400 |
£600 |
£1,000 |
What do I need to do?
Firstly, speak to your financial adviser, in order to find out if share giving would be a particularly tax-effective way for you to give, and if you have a number of different shares, which would be the most advantageous to donate.
Secondly,
contact us at the Church Urban Fund, so we know about your planned gift and can decide whether we would prefer to receive the shares themselves, or to ask you to sell them on our behalf and receive cash instead.
If the shares are to be transferred to the Church Urban Fund, you can either
download a Stock Transfer Form [link opens a new page], or obtain one from the Registrar of the company whose shares you hold (details are on the share certificate), complete, sign and date it, inserting the words ‘Church Urban Fund, Church House, Great Smith Street, London SW1P 3AZ in the box marked ‘full name and address of the person to whom the security is transferred’, and return it to Lucy Palfreyman at this address.
If the shares are to be sold by you on our behalf, we will need to exchange letters as evidence of this agreement before the sale takes place.