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Share Giving

Did you know that over 12,000,000 people in the UK are shareholders?

What is it?
Giving shares to charity is not a new idea, but since April 2000, there is 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 a charity. 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 charity.

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?
You need to:
• Contact the charity you wish to give shares to, they may help arrange the transaction
• Transfer the gift to the charity
• Keep evidence of the gift, the date it was made and the charity's acceptance
• Claim the appropriate tax relief
• Be aware that if you receive any benefit as a result of making the gift, this will reduce your tax relief.

If the charity isn't in a position to handle the process for you, and this is more likely with smaller charities, don't worry. It's quite straightforward and there is plenty of advice available from organisations such as Charities Aid Foundation (CAF), ShareGift or Community Foundation Network.

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 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.

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.

A number of organisations offer services to facilitate gifts of shares.

The Charities Aid Foundation provides a range of services to handle gifts of shares, large and small, including distributing the gift to more than one charity. If you have a small number of shares, ShareGift - the charity share donation scheme, can help. ShareGift will also help in other ways. (For example, you may wish to remain anonymous or to help more than one charity from the same shareholding).

Alternatively, Community Foundation Network can help with share gifts to your local community. You can contact them at:

Charities Aid Foundation
Kings Hill, West Malling
Kent ME19 4TA
Phone: 01732 520000
Website: www.allaboutgiving.org

ShareGift
24 Grosvenor Gardens
London SW1W 0DH
Phone: 020 7337 0501
Website: www.sharegift.org

Community Foundation Network
Swallow House
11 Northdown Street
London N1 9BN
Phone: 020 7713 9326
Website: www.communityfoundations.org.uk

Source: http://www.givingcampaign.org.uk/