YOUR DONATION/GIVING CAN GO AN EXTRA MILE WITH GIFT AID
Donating with Gift Aid
Gift Aid enables charities to get extra money on your donation without it costing you a penny more. To make a Gift Aid donation, you must be a UK taxpayer.
For example, on your donation of £1,000, FOCUS can claim £250 in Gift Aid, meaning your gift total will be £1,250.
If you pay tax at the higher rate, you can claim back the difference between the higher rates of tax (40% or 45%) and the basic rate (20%) on the total value of the donation.
For example, if you pay the 40% rate, a donation of £1,000 allows you to recover £250 so the donation costs you only £750 net, but FOCUS receives £1,250.
If you pay the 45% rate, a donation of £1,000 allows you to recover £312.5 so the donation costs you only £687.5 net, but we receive £1,250.
If you complete a Self-Assessment tax return and are entitled to a tax refund, you can choose to have all or part of the repayment sent directly to FOCUS Europe. This is called ‘Self Assessment Giving’. You can also ask the repayment to be made as a Gift Aid donation. HM Revenue & Customs (HMRC) sends your refund (plus any Gift Aid tax repayment) directly to FOCUS Europe.
Gifts of shares
Giving HMRC-qualifying shares to charity means you get Income Tax relief on the value of the shares, as well as exemption from Capital Gains Tax.
The tax relief applies if you give, or sell at less than market value, any qualifying investments to a UK charity.
If your employer has a payroll giving scheme, you can give directly to charity from your pay before tax is deducted. It costs you less to give because your donation is given to charity from your gross salary before any tax is taken off – so you don’t pay tax on it.
In some cases, employers have matching schemes which would match the donations (upto a certain limit) made by the employee resulting in even higher amounts donated to FOCUS Europe.
Giving in your will
Anyone can leave money to a charity in their will – this is known as a legacy. You can do this through your will, or simply by a declaration to the executors giving instructions as to how your legacy is to be distributed. All gifts that you leave to charity in your Will are free from Inheritance Tax. Your personal accountant or solicitor will be able to advise on the best option for you.
From 6 April 2012, if you make a gift in your will to charity of at least 10% of your net estate, the rate of inheritance tax due on the taxable part of the estate is reduced from 40% to 36%. A gift of 10% can leave the same amount available to your other beneficiaries as one of 4%. Any gift greater than 4% but less than 10% results in your beneficiaries receiving less money than they would have done if the gift was for 10%. HMRC provides an Inheritance Tax reduced rate calculator here: