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War Memorials Trust
 

Share giving

What is it?

Share giving is one of the most tax efficient ways to make a donation to War Memorials Trust, or any charity. Since April 2000 tax incentives have been available for individuals who wish to give to their favourite charity in this way. When making a gift of shares it is possible to claim full tax relief, for example making a gift of £1000 worth of shares to War Memorials Trust could cost the tax-payer as little as £600.

There are many reasons why share giving could be right for you.

  • You may hold windfall shares, perhaps from a privatisation or demutualization, that just gather dust and make very little difference to you but that would make an enormous difference to War Memorials Trust.
  • You may have inherited a small parcel of shares that tend to generate more paperwork than income. Once again these could be turned into something of real value by donating them to the Trust.

It is estimated that over 12 million people in the UK own shares with a total worth of around £200billion. Just 1% of this donated to charities would make an enormous difference.

How does it work?

Tax relief is available to all UK taxpayers donating shares and securities listed on the UK Stock Market and recognised stock exchanges overseas. It is also available for units in a UK open-ended investment company (OEIC) and some similar foreign investments.

Tax can be reclaimed equal to the market value of the shares on the day the donation is made together with extra costs such as brokers’ fees. Furthermore, capital gains tax on any increase of the value of them will not apply.

How to give your shares

  • Make a gift of your unwanted shares to a charity.
  • Keep evidence of the gift and the date it was made.
  • Claim the appropriate tax relief.
  • Be aware that any benefits receives as a result of your gift will reduce the tax relief.

Case study

A donor has an annual income of £100,000 and gives shares to the value of £20,000 to their favourite charity. The shares originally cost them £5,000. From the Inland Revenue’s point of view, the disposal would be deemed to have taken place at £5,000 and therefore the gift does not act as either a gain or a loss for Capital Gains Tax purposes. For Income tax purposes the donor’s annual income will also be reduced by £20,000 (the value of the shares). An effective tax rate of 40% will reduce this liability for income tax for the year by £8,000.

If the donor were instead to sell the shares they would be taxed on the capital gain (the sale price less the purchase price - £15,000) at 40% (£6,000) assuming they had already used their capital gains allowance, making the net amount they would receive £14,000. The real cost of the gift to the donor would therefore be only £6,000 (£14,000 minus £8,000). 

Your first step

If you wish to make a gift of shares to War Memorials Trust you need firstly to identify how you are going to transfer the shares.

  • Managing yourself: If you hold the share certificate you should contact the issuing company’s registrar. Their details will be on the share certificate, dividend vouchers, annual report and website. The registrar will provide a stock transfer form for you to complete and return to them.
  • Using a broker: If the shares are held in a nominee account you should ask your broker to transfer the shares for you. The broker may charge for this but you should be able to get tax relief on this as well as the value of the shares.

If you are uncertain how to proceed you can contact War Memorials Trust or alternatively the Charities Aid Foundation provides advice on giving shares.

Alternatively the charity ShareGift enables the donation of shares to charity in a general way as opposed to specifcally helping War Memorials Trust.

Further information

If you would like further information on share giving, War Memorials Trust or to discuss donating shares to War Memorials Trust please contact us.

 

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