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What is it?
Giving shares to
charity is not a new idea, but since April 2000 there has been a
new tax incentive to make Share Giving even more attractive.
Individuals who give shares to charity are entitled to claim back full
tax relief against the value of those shares. So a gift of shares worth
£1,000 will only cost a higher rate taxpayer £600, or £780 for lower
rate taxpayers. And furthermore no capital gains tax will apply.
There
are many reasons why giving shares might appeal to you. You might hold
windfall shares as a result of a privatisation or demutualisation that
are effectively gathering dust, making little difference to you
- but they could make a big difference to The Georgian Group. Or
you may own small parcels of shares, perhaps as a result of an
inheritance that you regard as a bit of a nuisance as they generate
more paperwork than income. These could be turned into something of
real value to others by donating these shares to The Georgian Group.
How does it work?
Tax
relief is available to UK taxpayers donating shares and securities
listed on the UK Stock Market, the Alternative Investment Market and
recognised stock exchanges overseas. It is also available for units in
a UK unit trust, shares in a UK open-ended investment company (OEIC)
and some similar foreign investments.
You can claim tax relief
equal to the market value of the shares on the day you make the gift,
together with any associated costs such as brokers' fees. Furthermore,
capital gains tax (CGT) on any increase in the value of the shares
since you bought them will not apply. However, if your shares have gone
down in value, you should be aware that you will not be able to use
this loss to offset any other CGT liability you may have.
How do I do it?
–
Transfer the gift to the charity. A number of organisations offer
services to facilitate gifts of shares, including The Charities Aid
Foundation and ShareGift, who are particularly useful if you have small
number of shares. You can contact them at:
Charities Aid Foundation
Kings Hill, West Malling
Kent ME19 4TA
Phone: 01732 520000
ShareGift
24 Grosvenor Gardens
London SW1W 0DH
Phone: 020 7337 0501
– Keep evidence of the gift, the date it was made and the charity's acceptance
– Claim the appropriate tax relief using The Georgian Group's unique HMRC code: HAH07PG
If
you would prefer to handle the gift yourself, what you do depends on
whether you have an actual share certificate or whether your shares are
held in a nominee account.
If you hold a share certificate:
contact
the company's registrar. Their details can be found on your share
certificate, dividend vouchers, the company's annual report or their
website. The company's registrar will provide a stock transfer form for
you to complete and return to them.
It is important that you
keep a copy of this form. It is your evidence to Her Majesty's Revenue
& Customs concerning the date of the gift. The company registrar
will then issue a new certificate to the charity.
If your shares are held in a nominee account:
ask
your broker to transfer the shares for you. The broker might charge you
for this service but you should be able to get tax relief on this as
well as the value of the shares.
You can claim relief by:
– completing the appropriate section of your Self Assessment return, or
– requesting that your PAYE code is amended for the current tax year, or
– requesting that your Self Assessment Payments on Account are reduced.
If
you are not sent a Self Assessment return at the end of the tax year,
or if you want to claim relief before the end of the current tax year,
you should write to your Tax office, giving full details of the gift,
in order to claim the relief.
Further Information
Further details on Share Giving are available from Her Majesty's Revenue and Customs, 0845 3020203. Alternatively, consult the HMRC leaflet IR 178. |
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