Donations > Tax Efficiency
If you pay UK income tax you can lessen the load of giving considerably, by using the Gift Aid scheme the Foundation can add 28p to every £1 you donate. For instance, it is possible to give a total of £10,000 to the Foundation at a net cost to you of £6,000. Here’s how:
| Donation | £7,800 |
| Gift Aid (the lower rate tax you have paid to earn your donation amount) | £2,200 |
| Total value to Foundation | £10,000 |
| Higher rate tax relief which you are entitled to in respect of this gift (claimable within the Self-assessment tax return) | £1,800 |
| Net cost to you | £6,000 |
Many people choose to lessen the load further by spreading the donation over a number of years (e.g. 4 years at an annual net cost of £1,500)
Companies which make donations to charities can reduce their corporation tax through Gift Aid.
Individuals can obtain a double from of tax relief by donating gifts of equities. The market value of the gift can be offset against any income tax liability and in addition the gift would be exempt from any liability for capital gains tax.
For instance:
| A donor gives shares worth £25,000 to the Tonbridge School Foundation (with a capital gains liability, after allowances, of £10,000). | £25,000 |
| He/she deducts the £25,000 from annual income liable to tax, thereby saving £10,000 (assuming a 40% tax rate). | £10,000 tax saving |
| He/she saves a further £4,000 on Capital Gains Tax, which would have to be paid on selling the shares. | £4,000 tax saving |
| Net cost to donor | £11,000 |
| Foundation receives | £25,000 |
If as a result of your tax assessment the Inland Revenue is required to make a payment to you, the IR offers UK taxpayers the opportunity to nominate a charity to receive what may be an unexpected repayment. The School Foundation is registered with this scheme and if you need further information please contact the Foundation office. In the meanwhile should you have any queries please contact the Foundation Office.
While we endeavour to ensure all information is correct, we advise you to consult your tax advisor and accountant when considering changes to your financial affairs. You may also refer to the Inland Revenue website www.inlandrevenue.gov.uk for the latest information on tax efficient giving.