What are the tax benefits of giving shares?
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. The relief is against your income tax for the year. For example if you give Christian Aid £1,000 worth of shares, and you are a higher rate taxpayer, you will pay £400 less in income tax that year.
Additionally, you will not have to pay any Capital Gains Tax (CGT) on any increase in the value of the shares since you bought them. This could mean a further saving. If shares you donate 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 have.
However, as Christian Aid is unable to give you financial advice we would urge you to talk to your financial advisor about the tax implications of donating shares.
How do I claim the tax back?
You can claim your tax relief by completing the appropriate section of your Self Assessment return. 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 relief.
Which shares are eligible for tax relief?
Here is a guide to which share types are eligible for tax relief:
- Shares and securities listed or dealt on the UK Stock Exchange, including the Alternative Investment Market
- Shares and securities listed or dealt in on any overseas recognised stock exchange
- Units in a UK authorised unit trust (AUT)
- Shares in a UK open ended investment company (OEIC)
- Holdings in certain foreign collective investment schemes (broadly schemes outside the UK that are equivalent to unit trusts and OEICs)
- Unlisted shares are exempt from capital gains tax, but not available for income tax relief
What do I have to do to give them to you?
This will depend on what type of share you have:
a) Share certificates
If you have paper share certificates, then you will need to send them to us. We will then send you the appropriate transfer form for you to complete and send back. If you have lost the certificates, please see below.
You will need some evidence of the transfer of ownership of the shares for your tax claim. We will send you a copy of the transfer form and a letter acknowledging your gift, which you will be able to use as evidence.
b) Shares held electronically (nominee account)
Some shares are held electronically rather than in the form of paper share certificates. If your broker is holding your shares in this way (under the Crest system), then they can be transferred directly to Christian Aid. To donate in this way you will need to inform your broker in writing of your wishes and pass on the details of our broker. Please contact us so we can give you this information.Is it more useful for me to sell the shares and give you the money?
Unfortunately we are unable to give investment advice and suggest that you talk to a financial advisor to assess your circumstances. It depends on your circumstances and whether you wish for Christian Aid or yourself to gain the greater benefit from the tax relief.
With a gift of shares, you get the tax relief. If the shares you give are worth say £1,000, Christian Aid will get that value and you can claim £200 or £400, depending on whether you are a basic rate or higher rate tax payer.
If you sell the shares and you give the £1,000 to Christian Aid, through Gift Aid (which requires the completion of a simple form), Christian Aid can claim back basic rate tax and your cash gift of £1000 is worth £1280 to us. If you are a higher rate taxpayer, you can also claim back the difference between the basic and higher rate. But if you sold the shares to make a cash donation, you may have to pay Capital Gains Tax on any increase in the market value of these shares.
For more information contact your financial advisor, local tax office or see the HMRC website.I cannot find my share certificates, what do I do?
If you have lost your paper share certificates, you will need to contact the company’s registrar for a letter of indemnity. This will prove you own the shares and then you can send this to us instead of the paper share certificates. There may be a charge for the indemnity.
Can I gift aid shares?
You cannot Gift Aid a donation of shares. However, should your personal circumstances favor this method of giving then you can sell the shares yourself and gift aid your cash donation to Christian Aid (see above).
I only have a few shares, can you still accept them?
If you have a small number of shares (valued, say, under £500), ShareGift, the charity share donation scheme can help. It will accept your shares and then pool them with shares given by other people. ShareGift make donations to a wide range of charities – and do support Christian Aid. You can contact ShareGift on 020 7930 3737.
Are there any shares you will not accept?
Christian Aid’s ethical policy stops us from fundraising from organisations whose work, policies or product is detrimental to people in developing countries. If the shares being offered could potentially fall into this category, Christian Aid would take a pragmatic approach based on benefit vs risk and potential damage to Christian Aid and its partners by accepting them. Such shares would be sold straight away.
What will Christian Aid do with the shares?
Historically, Christian Aid has not kept an investment portfolio of shares so has sold donated shares as soon as possible. Given the volatility of stock markets in recent times, we will sometimes hold shares that are listed in the FTSE4Good Index until markets recover.
More information: Contact Karen Aycinena – 0207 523 2375