In this section:
- Tax efficient giving to charity: the basics
- Giving to charity through Gift Aid
- Giving to charity through your payslip or pension
- Gifts to charity of land, buildings or shares by individuals
- Leaving gifts to charity in your will
- Giving to charity through your Self Assessment tax return
- Keeping records of your gifts to charity
Tax efficient giving to charity: the basics
If you want to donate to charity and you’re a UK taxpayer, there are a range of tax incentives and schemes available that help you - and your chosen charity or Community Amateur Sports Club (CASC) - to get the most from your donation.
This guide is written for individual taxpayers rather than businesses.
On this page:
- Types of tax efficient charitable giving
- Giving through Gift Aid to a charity or CASC
- Giving through your pay or pension to charity
- Giving assets to charity
- Leaving gifts in your will to a charity or CASC
- Giving to charity through your Self Assessment tax return
- Keeping records of your donations to charity
- Contacting the HMRC Charities Helpline
- More useful links
Types of tax efficient charitable giving
There are a number of tax efficient ways to give to charity as an individual. Using these methods you might be able to claim some tax back. Your chosen charity could also claim extra income on your donation from the government, and benefit from tax exemptions or relief.
These tax incentives are only available for UK taxpayers making gifts to UK charities. Depending on the type of gift you make, you may have to make a claim to receive the tax relief (either on your Self Assessment return or by writing to or telephoning your own tax office).
The different ways you can give tax efficiently are summarised below, with links to further guidance for each.
Giving through Gift Aid to a charity or a CASC
Gift Aid is an easy way to help charities and CASCs get extra money on your cash donations. Your Gift Aid donation is treated as if its had basic rate income tax deducted from it, and charities and CASCs can reclaim that tax from HM Revenue & Customs (HMRC).
To make a Gift Aid donation, you must pay at least as much UK tax (Income Tax and/or Capital Gains Tax) as the amount of tax that the charity or CASC is reclaiming - which is 25 pence on every pound you donate. If you make a number of Gift Aid donations, you must pay enough UK tax on the total amount of those donations. If you don’t pay enough tax you may have to pay HMRC any shortfall in tax paid.
Relief for higher rate taxpayers
If you pay tax at the higher rate, you can claim back the difference between the higher rate of tax (40 per cent) and the basic rate of tax (20 per cent) on the total value of the donation.
Find out more about giving to charity through Gift Aid
Giving through your pay or pension to charity
You can give money to charity directly from your pay or company/personal pension using the Payroll Giving scheme.
It costs you less to give because your donation is given to charity from your gross salary before any tax is taken off - so you don’t pay tax on it.
You can give to as many charities as you wish and you can cancel your Payroll Giving agreement at any time.
Find out more about giving to charity through your payslip or pension
Giving assets to charity
Income Tax relief
If you give UK land, property or qualifying shares to a UK charity, or sell them to a charity at less than their market value, you can claim Income Tax relief and lower your tax bill. Qualifying shares are those listed or traded on a recognised stock exchange. Note that Income Tax relief is not available if you are giving land, property or shares to a CASC.
Capital Gains Tax relief
You’ll get relief from Capital Gains Tax when you:
- give any asset to a charity or CASC
- sell any asset to a charity or CASC for less than its market value
Find out more about giving land, buildings or shares to charity
Find out more about Capital Gains Tax exemption on gifts to charity
Leaving gifts in your will to a charity or CASC
If you leave a gift to a UK charity or CASC in your will, its value will not be included when valuing your estate (your money, possessions and property) for Inheritance Tax purposes.
Gifts made to a UK charity in the seven years before your death are also exempt from Inheritance Tax.
Find out more about leaving gifts to charity in your will
Giving to charity through your Self Assessment tax return
If you complete a Self Assessment tax return, you can donate any tax refunds directly to charity by filling out the relevant section on your tax return. You don’t have to do any extra paperwork.
You can also use Gift Aid to add to the value of your donation. The money goes straight into the charity’s bank account (along with the Gift Aid tax repayment and three pence supplement from HMRC) so the charity doesn’t have to do any extra paperwork to reclaim Gift Aid.
Find out more about donating your tax refund
direct to charity
Keeping records of your donations to charity
You must keep records of your donations to charity to make sure that you claim the correct amount of tax relief and pay the right amount of tax.
For every tax year, you should keep the following records:
- details of Gift Aid donations showing the date, the amount and the recipient charities or CASCs
- legal documents showing the sale or transfer of assets to charity - including share transfer documents or certificates or land transfer documents
- any documentation from a charity asking you to sell land or shares on its behalf
Find out more about keeping records of
your gifts to charity
Contacting the HMRC Charities Helpline
For more help you can contact the Charities Helpline on Tel 0845 302 0203 (open from 8.00 am to 5.00 pm, Monday to Friday).
More useful links
Giving to charity
if you’re a sole trader or partnership
Gifts to charity made by companies
Gifts to charity of company equipment, trading stock or employee help
