Giving Stocks, Shares and Securities - The most tax-efficient method of supporting
 The Budget in March 2000 saw a revolution in how individuals and companies can donate to charity which, for the first time, saw real benefits accruing to the donor as well as the beneficiary of the gift. This page explains both the tax advantages and the method of donating gifts of shares to the Foundation.
Gifts of Shares
Tax relief applies to gifts of quoted shares and certain other qualifying investments by individuals and companies, whether resident or non-resident in the UK, when calculating their income or profits for tax purposes. This is in addition to the existing relief from Capital Gains Tax. The amount the donor can deduct is: The market value of the shares or securities at the date of disposal; plus any incidental costs of disposing of the shares. Donors can therefore claim relief at their top rate of tax on their Self Assessment or Corporation Tax return.
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| Worked example |
| A cash gift of £50,000 |
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DONOR
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FOUNDATION
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| Cash gift |
£50,000
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£50,000
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| Gift Aid |
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£14,103
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| Higher rate tax reclaim |
(£12,500)
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| Cost/benefit |
£37,500
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£64,103
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| A gift of quoted shares worth £50,000 |
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DONOR
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| Gift of shares |
£50,000
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£50,000
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| Income tax relief (40%) |
(£20,000)
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| CGT avoided (18% of gain) |
(£7,200)
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| Cost/benefit |
£22,800
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£50,000
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The worked example presumes a taxable income of £100,000+,
that the shares were originally purchased for £10,000 and
that the donor’s annual CGT relief has been utilised elsewhere.
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What are qualifying shares and securities?
Those listed or dealt in on a recognized stock exchange, whether in the UK or elsewhere, including shares traded on the Alternative Investment Market; units in an authorised unit trust; shares in a UK open-ended investment company; and holdings in certain foreign collective investment schemes (offshore funds).
How to donate a qualifying investment to the Foundation
If you decide to donate stock to the Sherborne School Foundation (‘Foundation’) the first action is to move the stock from your name into the Foundation’s custodial account.
Most of the work will be done by the Foundation Office, but there are certain actions that only you can take.
• Where the stock is held in certificate form you will be sent a stock transfer form to sign and return to the Foundation Office, together with the certificate(s).
• Where the stock is dematerialised (i.e. held in CREST, CGO or as an uncertificated holding in a Unit Trust) you should contact the Foundation Office and give details of the stock to be transferred, and the name of your broker/investment manager together with a contact name. In the case of a Unit Trust you should provide the account number of the holding.
• For stock held in CREST or CGO you should authorise your broker/investment manager to accept instructions from the Foundation's investment managers to transfer the stock to their nominee.
• For an uncertified Unit Trust you should ask the Unit Trust manager to prepare a stock transfer form for you to complete and return to the Foundation.
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