Tax Efficient Giving

Recent changes have introduced several incentives to encourage corporate and individual donations. You should ensure that your charity is making the most of these tax efficient means of giving.

Gifts of land and buildings

Since April 2002 tax relief has been available on gifts of freehold or leasehold property to charities.

Self-Assessment tax returns

From April 2003 higher rate taxpayers are able to obtain tax relief for their Gift Aid donations by carrying them back to the previous year.

Gift Aid

Charities were generally quick to take advantage of the revised rules with Gift Aid forms being much in evidence - although some have come unstuck by using the wrong wording. Charities should ensure that they are looking to increase their income by 28% by converting donors to Gift Aid in the correct way.

Gift Aid declarations:

can be made in writing, on the telephone or over the internet, and
must contain the name and address of the donor, the name of the charity and a statement that the donor pays sufficient income or capital gains tax to cover the tax reclaimed by the charity.

Charities should ensure that donors specify ‘income tax’ or ‘capital gains tax’. A declaration stating that the donor pays ‘tax’ will not suffice.