Giving Shares

Giving Shares

Whether you've got a few old BT shares stuffed in a back drawer gathering dust, or you're an active player on the stock exchange with a sophisticated share portfolio, if you give shares to charity you could get personal tax relief of up to 40% while supporting a good cause.

Gifts of shares provide attractive tax relief for both basic and higher rate taxpayers. When making a donation of shares, donors are able to deduct from that year's taxable income:

  • the market value of the investments at the date of the gift to charity
  • plus any incidental costs incurred in transferring the investments, such as broker's fees
  • less any proceeds or benefits the donor receives in consequence of the gift

In addition, gifts of shares to charity are free from liability to Capital Gains Tax.

There is no minimum or maximum number of values of shares that can be donated. Donors can claim the tax relief on their self-assessment tax returns or by contacting their local tax office.

Gift of Shares Example

Mrs Smith owns 5,000 shares in XYZ plc which are valued at £2.00 each when she gives them to Abertay. She is charged a broker's fee of £50.00 for handling the transfer.

Mrs Smith has £10,000 (the value of the shares), plus £50 (the broker's fee), for a total of £10,050.

If Mrs Smith is a higher rate taxpayer, she will be eligible to claim 40% tax relief on the above amount, saving her £4,020. Thus a gift of shares worth £10,000 will cost higher rate taxpaying Mrs Smith £5,980. The transaction would not be liable to any Capital Gains Tax.

If Mrs Smith is a basic rate taxpayer, she will be eligible to claim 20% tax relief on the above amount, saving her £2,010. Thus a gift of shares worth £10,000 will cost basic-rate taxpaying Mrs Smith £7,990.

There is no minimum or maximum number of value of shares that can be donated. Donors can claim the tax relief on their self-assessment tax returns or by contacting their local tax offices.