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Philanthropic giving

Polly Dowdell, Assistant Manager, Private Clients
10/12/2021
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Giving more to the causes you care about this festive season

The festive season is upon us and you may be considering supporting the causes you care about by making charitable donations.

There are a number of tax-efficient methods which can be implemented to give to charities, either by way of making a cash donation or by making non-cash gifts such as investments, land or property. Alternatively, a charitable foundation or trust may be established to meet a family’s long-term philanthropy strategy.

In addition to supporting the causes you care about, making charitable donations can also be tax-efficient if structured efficiently. However, we understand that making a charitable donation in a tax-efficient manner is only one element of what you are ultimately trying to achieve.

Our top tips for philanthropic giving

There are various options for making philanthropic donations and these can be complex, often making it difficult to measure and achieve giving aspirations. We have however provided some helpful top tips and points to consider when making charitable donations:

  • consider what charities inspire you, and who you would like to make donations to
  • think about the causes you are passionate about, you may then consider making a charitable donation to help this cause
  • consider how you would like to donate and whether this will be a regular or occasional donation
  • explore the different options of how you can give to charity. If you are very passionate about a cause, you may even consider becoming a volunteer for the charity
  • consider how your donation will benefit the charity/charities and also, consider the tax-efficiency of the donation.

Tax reliefs available

There are many ways to make philanthropic donations and we have discussed the tax relief for some of these options below.

  • Gift Aid Donations - Gift Aid donations are made net of 20% basic rate tax. For example, if you would like to donate a total of £100 to your chosen charity, you will give the charity £80 and the charity will claim back £20 from HMRC. This is referred to as relief at source. If you are a higher rate or additional rate tax payer, you can claim further relief via your self-assessment tax return. See our full article on Gift Aid.
  • Non-Cash Donations - If you were to donate quoted shares or land to charity, the market value of the shares or land (at the date of the gift) including any costs of making the donation will be deducted in arriving at your net income for the tax year in which the gift is made.

We can work with you to establish your goals and offer as little or as much support as you may require to support the causes you care about.

If you have any questions about the issues raised in this article or would like to discuss your individual circumstances, get in touch with your usual Crowe contact.

Insights

Donating to charity and a UK resident paying tax at more than 20%, consider making the payment under Gift Aid so both you and the charity benefits.
The different types of gifts you can make to charity and the tax benefits and consequences of doing so.
Have you made the most of your annual allowances? It is your last chance to take advantage of the tax planning opportunities in advance of 5 April.
Donating to charity and a UK resident paying tax at more than 20%, consider making the payment under Gift Aid so both you and the charity benefits.
The different types of gifts you can make to charity and the tax benefits and consequences of doing so.
Have you made the most of your annual allowances? It is your last chance to take advantage of the tax planning opportunities in advance of 5 April.

Contact us

Rebecca Durrant
Rebecca Durrant
National Head of Private Clients, Manchester