Donating Shares
Gifting HMRC-recognised shares to a charity will give individuals substantial income tax and capital gains tax relief, enabling you to unlock significant capital amounts to enable The Share Foundation to provide large numbers of disadvantaged young people with a decent start to adult life: for example, a gift of £100,000 could cost just £35,000, an uplift of over 185%.
There are a number of ways you can gift shares, but the two most effective routes are to:
gift shares directly to The Share Foundation; or
sell your shares to The Share Foundation for a percentage of their market value.
A wide range of shares and securities can be gifted in this way. These include those listed or dealt on a recognised stock exchange in the UK and many international exchanges, such as the United States, Canada, Australia, Hong Kong, New Zealand, Japan, Singapore, Johannesburg, Switzerland and countries in the European Union. Other investments which qualify include authorised unit trusts and OEICs and certain foreign collective investment scheme holdings.
Example of gifting shares directly to The Share Foundation:
| Qualifying assets gifted to TSF that have a 100% capital gain | £100,000 |
| Capital Gains Tax saved on total capital gain | £20,000 |
| Income tax relief on the £100,000 gift for a 45% taxpayer | £45,000 |
| Net cost to the owner/donor | £35,000 |
| Amount received by TSF (assumes no significant sale discount) | £100,000 |
| Uplift on net cost to the owner/donor | 185% |
Note: if the shares had cost the owner/donor £50,000 the capital gains tax passed over would reduce to £10,000, and the corresponding uplift would be 122%.
Example of selling your shares to The Share Foundation:
You can sell your shares as an individual for less than their market value to The Share Foundation and the difference will be your donation to our work. Your taxable income is reduced by the donation amount (i.e. the market value less the sale price paid by The Share Foundation), thereby reducing your overall tax liability. Please note that the market in your shares must be fully liquid for this route to be used, to ensure that we can raise cash from our market sale of the shares without delay.
| Value of shares sold to TSF for £50k, at 25% of market value | £200,000 |
| Value that TSF buys the shares for and pays the donor | £50,000 |
| Capital gains tax saved on the £150k value gifted (assumes nil base cost) | £30,000 |
| Income tax relief on the £150k value gifted, at 45% rate | £67,500 |
| Net cost of the donation to the owner/donor | £52,500 |
| Amount retained by The Share Foundation after market sale | £150,000 |
| Uplift on net cost to the owner/donor | 185% |
Note: the above examples do not make allowance for transfer/transaction costs
Please contact Kathryn Caswell on 01296-310409 or kathryn.caswell@sharefound.org to discuss specific proposals for donating shares.