Tax relief on gifts of land, buildings or shares
What to do if someone donates land, buildings or shares to your charity or CASC and how to transfer ownership.
Introduction
As a charity or community amateur sports club (CASC), you can accept gifts of land, buildings or shares from donors to raise funds and acquire assets for your organisation.
A gift of land or buildings
If someone gives you a gift of land or buildings, you can keep it or or sell it to release funds. If you decide to keep it, your charity or CASC benefits by:
- receiving the gift at its value on the date of transfer
- exemption from Stamp Duty Land Tax
There are several steps you’ll need to follow to transfer ownership. First, you’ll need to give the donor a certificate to show that your charity has agreed to accept their gift.
This needs to include:
- a description of the land or property that has been given to your charity or CASC
- the date that the gift was given to you
- a statement confirming that your charity or CASC has acquired the ‘qualifying interest’ in the land or property. This refers to whether the land has a freehold or a leasehold interest
A gift of shares
If someone gives you a gift of shares, and they have been transferred to your charity or CASC’s name, you can decide to keep them or sell them.
If you keep them, the benefits for your charity or CASC are:
- you’ll be exempt from Stamp Duty charges
- you’ll receive any future dividends from the shares
You or the donor will need to arrange for ownership of the shares to be transferred to your charity or CASC. This can be done using a stockbroker, or you can do it yourself.
You or the donor will also need to complete a stock transfer form, attach the share documents and send them to the appropriate Stock Exchange registrar.
You may want to seek professional advice before deciding whether to accept shares as a gift.
Another option is to ask the donor to sell the shares on your charity’s behalf. If you decide to do this, you’ll need to put the request in writing. The donor of the shares can use your written request to still claim tax relief on the value of the shares given to your charity. Your letter to the donor should make it clear that the donor gave your charity or CASC shares before selling them on your behalf.
Information to keep for your records
You’ll need to keep a copy of the statement confirming that your charity has acquired the ‘qualifying interest’ in the land or property.
If you’re not sure whether an investment you’ve been given will qualify, then you should contact HMRC Charities for advice.