Calculate the value of your donation to charity
Work out the amount of Income Tax or Corporation Tax relief you can claim if you give away or sell land, property or shares to a charity.
If you give land, property or shares to a charity (this includes selling them for less than their market value), you could pay less:
- Corporation Tax and Capital Gains Tax - if you鈥檙e a limited company
- Income Tax and Capital Gains Tax - if you鈥檙e an individual
If you give land property or shares to a CASC, you could pay less Capital Gains Tax if you鈥檙e a limited company or an individual.
There are different rules around what you can give if you鈥檙e a or an .
The way you work out your tax relief is different depending on whether you give away land, property or shares to charity, or sell them for less than they鈥檙e worth.
Market value
You鈥檒l need to know how much the gift would sell for in an open market (its 鈥榤arket value鈥�) to calculate your tax relief.
You should use the value of the gift on the date you transfer it to the charity or CASC (known as the 鈥榙isposal date鈥�). You can get with this and add these costs to the market value when you work out your tax relief.
Calculate tax relief on a gift
If you or your company donates land, property or shares to charity or CASC, work out your tax relief amount by:
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Working out the value of the gift on the date you transferred it (the 鈥榙isposal date鈥�).
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Adding costs like legal fees or brokers fees.
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Subtracting the value of any benefits the charity or CASC gives you as a result of the gift.
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You鈥檒l be left with your tax relief amount.
Example:
ABC Ltd wants to give a property it no longer needs to a charity it supports.
A property agent values the property at 拢90,000 and the company is charged 拢400 for the value and other legal fees.
As a thank you gift, the charity gives the company tickets to an event worth 拢500.
The tax relief the company can claim is:
- the value of the property: 拢90,000
- plus the valuation and legal fees: 拢400
- equals: 拢90,400
- minus the value of the benefit received: 拢500
- total tax relief amount: 拢89,900
Calculate tax relief on a sale at less than market value
If you or your company sells land, property or shares to a charity or CASC for less then its market value, work out your tax relief by:
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Working out the market value on the disposal date.
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Adding costs like legal fees or brokers fees.
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Subtracting the selling price.
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Subtracting the value of any benefits the charity or CASC gives you as a result of the gift.
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You鈥檒l be left with your tax relief amount.
Example:
John owns 1,000 shares in XYZ plc, a company quoted on the London Stock Exchange. The shares are valued at 拢4.50 each.
John would like to give the shares to a charity or CASC, but needs to get some money for them. So he agrees to sell them to a charity for 拢2 each.
As a token of gratitude, the charity gives John a book worth 拢25.
The tax relief John can claim is:
- the value of the shares: 拢4,500
- minus the amount the charity pays: 拢2,000
- equals: 拢2,500
- minus the value of the benefit received: 拢25
- total tax relief amount: 拢2,475
If you鈥檙e an individual
You can by deducting the value of your donation from your total taxable income for the tax year (6 April to 5 April) in which you made the gift or sale to charity.
If you鈥檙e a limited company
You can claim Corporation Tax relief in the that covers the date of the gift or sale to charity.
The most you can deduct is the amount that reduces your company鈥檚 profits to zero.