What is Share Giving?
Giving shares to a charity is not a new idea, but there is now an extra tax incentive to make Share Giving even more attractive. If you give shares to the BHA you can claim back full tax relief against their value. So if you are a higher rate taxpayer, a gift of shares worth £1,000 will only cost you £600, or £780 if you pay tax at the standard rate – and you don’t have to pay capital gains tax.
Have you got a few windfall shares from a privatisation or demutualization, just gathering dust? Or perhaps you inherited a small parcel of shares. Owning just a few shares is often regarded as a bit of a nuisance – they are expensive to sell and may generate more paperwork than income. But these shares could make a big difference to the BHA.
How does the tax benefit 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. Capital gains tax (CGT) on any increase in the value of the shares since you bought them does not apply. However, if your shares have gone down in value, you will not be able to use this loss to offset any other CGT liability you may have.
Further details from the Inland Revenue website or the Inland Revenue leaflet IR 178, or you can telephone the Inland Revenue helpline on 0845 3020203.
What do I have to do?
The simplest way is to transfer the shares to the BHA, keep evidence of the gift, the date it was made and the BHA’s acceptance, and claim the appropriate tax relief.
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 the Inland Revenue 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.
Further information and advice about transferring shares is available from the Charities Aid Foundation (CAF) website all about giving , or ShareGift .
Both these organisations will also handle the gift of shares for you. You can contact them at:
Charities Aid Foundation
Kings Hill, West Malling
Kent ME19 4TA
Phone: 01732 520000
46 Grosvenor Street
London W1K 3HN
Phone: 020 7337 0501