Gifts of Real Property to Charity

This new relief gives relief from income tax or corporation tax for gifts of real property i.e. land and buildings to charities. This is in addition to the existing exemption from capital gains tax.

The relief will work in a similar way to the existing relief for gifts of shares to charity. The donor will deduct the full market value of the property, (plus any incidental costs of disposal), less anything received in return, from his income (or profits if a company) for tax purposes. Donors will have to show that the charity has agreed to accept the gift of the property.

Q. What sort of property can be given?

A. Any freehold or leasehold property, as long as the whole interest is given.

Q. What is the starting date?

A. For companies, gifts made on or after 1 April 2002. For individuals, gifts made on or after 6 April 2002.

Q. How much tax relief is given?

A. An individual or company can claim relief for the full market value of the property given away, less the value of anything received in return.

Q. How is the value of the property calculated?

A. The value is what the property would fetch on an open market sale.

Q. Can a gift be made to any charity?

A. Yes, as long as the charity agrees to accept it.

Q. Can donor give house to charity but still live in it until he dies?

A. No. Donor would not be able to claim the relief for such an arrangement, because he would not have given away his whole interest.

Q. Can just a part share be given to charity?

A. No, it must be the whole interest.