Gifts of land, property or qualifying shares, or a sale to the College of such assets at less than their market value, may give rise to a claim for income tax and capital gains tax relief. A brief outline of how this process works may be found below, but for more detailed information please visit the HM Revenue & Customs website – www.hmrc.gov.uk – or contact your local tax office.
Income Tax Relief
Donors may be able to claim income tax relief on gifts/sales below market value) of:
- Shares/securities listed on a recognised stock exchange
- Shares/securities dealt in on a designated market in the UK
- Units in an authorised unit trust (AUT)
- Shares in a UK open-ended investment company (OEIC)
- Holdings in certain foreign collective investment schemes
- Qualifying interests in land in the UK
Capital Gains Tax Relief
Donors may receive relief from capital gains tax (CGT) when they gift or sell at less than market value an asset to the College. Donors who make a gift of an asset are treated as making no gain or loss for CGT purposes and so do not pay any CGT on the gift.
Calculating Income Tax Relief on Your Gift
The first step is to add to the market value of the asset you are donating any associated costs of the disposal, such as legal fees. Deduct from this figure any money or other benefits you, or anybody connected with you, will receive in return for the gift. The resulting figure is then deducted from your total income for the tax year in which you make the gift.
Mr Smith owns a second home and decides to give it to the College in tax year 2012-13. A qualified property agent values the property at £150,000 and charges £500 for his valuation services. To calculate the deduction from income for 2012-13 simply add the value of the property and the total amount of fees:
- Property: £150,000
- Valuation fees: £500
- Total: £150,500
Thus, income tax relief of £150,500 from total taxable income is available for tax 2012-13.
Claiming Tax Relief
A claim for income tax relief can be made through a self assessment tax return or via your local tax office. Please note that if you are due a tax refund as a result of your gift, you may ask HM Revenue & Customs to pay all or part of it directly to the College, and you may do so as a Gift Aid donation.
If you would like to discuss making a gift of property or shares, please contact the Development Office on +44 (0)20 8299 5335 or email on email@example.com. More detailed information on giving land, property and shares to charity is available from the HM Revenue & Customs website – www.hmrc.gov.uk.