Tax Effective Solutions

No one gives to charity just for tax reasons, but it is good to know that donations to Cambridgeshire Community Foundation can bring additional benefits to you and to local charities. For example, if you are a tax payer, just signing a Gift Aid Declaration can enable the Foundation to receive an additional 28p for every £1 donated, from the Inland Revenue.

As well as Gift Aid, Cambridgeshire Community Foundation offers many opportunities to tax effectively give to charity, such as Gifts of Shares, Gifts of Land and Buildings, Legacies and Payroll Giving

Gift Aid

A simple Gift Aid declaration increases the value of your donation. Under the scheme the Community Foundation can claim an additional 25p from every £1 donated by UK taxpayers. In addition to this, the Government is providing Transitional Relief of 3 pence on the pound. So while CCF will claim 25p from each £1 donated, we will actually receive 28p until March 2011. In addition, higher rate tax payers can claim tax relief on the gross amount of the donation.

Self assessment Taxpayers, since April 2004, are able to nominate a charity to receive all or part of any tax rebate due to them.

Gift of Shares

A tax efficient way of giving where the benefit to the charity may be many times more than the cost to the donor. When an individual gives shares to a charity, they can get:

• Income tax relief on the value of the gifted shares; and
• Exemption from Capital Gains Tax on the 'disposal' of the shares.

With the higher rate of income tax at 50% from April 10 for income over £150,000 and capital gains tax at 18%, this can amount to a substantial tax break.

Gift of Land and Buildings

Individuals who donate land or buildings to charity benefit from income tax relief and exemption from capital gains tax, similarly to gifts of shares.

Tax relief is given for the market value of the property as a deduction from the donor's income tax liability for the tax year when the gift is made. The amount that can be deducted is:

• The market value of the property; plus
• Any associated costs of transferring the property, such as solicitor's fees; less any proceeds of the sale, or the value of any benefits received in consequence of making the gift.

The income tax relief is in addition to exemption from Capital Gains Tax.

Payroll Giving

Registering a company for Payroll Giving means all employees can donate at maximum tax efficiency to a charity of their choice to which the government makes a further donation. This has been shown to have a very positive effect on employee relations, demonstrating that the company is committed to support its staff and the local community.

Payroll Giving, or Give as You Earn, offers a very convenient way for employees to make small contributions on a regular basis which is ideal for those wanting to support small charities in their local community. Donations are taken directly from the source of the donor's income and employers deduct the specified amount before tax is calucated on the employee's salary.