Giving to Hertfordshire Community Foundation (HCF) offers a fantastic opportunity to support local grassroots charities. Not only does it empower local community causes, but it also allows you to minimise your tax burden concurrently, making charitable contributions a savvy decision. If you wish to reduce your liability for the tax year 2023 - 2024, you will need to act before 5 April 2024.
How can I make my gift?1. You can make a gift of cash and combine this with Gift Aid - For basic rate taxpayers, HCF can reclaim basic rate tax on your gift. This means you can effectively gift £100 to HCF with a spend of just £80.
- For higher rate and additional rate taxpayers, you – or HCF - can reclaim the difference between basic and higher rate tax. For example, a spend by a higher rate taxpayer of £80 to HCF means a total gift, after HCF has reclaimed tax, of £100, and the taxpayer can reclaim additional tax of £20, which means the net cost to them overall is £60. An additional rate taxpayer may reclaim additional tax of £25, which means the net cost to them overall is £55.
- In order to make a valid Gift Aid donation, you will need to sign a declaration to confirm that you have paid enough tax to fund it, and agree to HCF claiming Gift Aid. You can also make a donation and claim Gift Aid via our online donation page here.
2. You can make a gift through Payroll Giving- If your employer offers the scheme, you will not pay income tax on any gifts to HCF – the gift will be made before that tax is deducted from your pay.
3. You can make a gift of property or shares- There are no Inheritance Tax consequences of gifting property or shares given to HCF. Under the charitable exemption rules, the full value of the gift bears no IHT either at the time of the gift or on your death.
- A saving on income tax is achieved by deducting the value of your gift to HCF from your taxable income on your tax return.
- There is no Capital Gains Tax to pay on gifts to HCF which have increased in value since you acquired them.
4. You can make a gift in your Will - Gifts to HCF made in your Will are free of Inheritance Tax.
- If you gift 10% or more of your net estate to HCF, the Inheritance Tax paid on the remainder of the estate is reduced by 4%, from 40% to 36%. For large estates this can represent a substantial saving.
- The advantage of making a gift to HCF rather than to a named charity is that you eliminate the risk of gifting to an individual charity which no longer exists at the date of your death. This risk can have serious ramifications if you have left the whole of your estate to charity as the gift you intended to make may not pass to the correct charity.
When considering charitable giving, do remember to seek advice from your own professional advisor if in doubt.
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Many thanks to: Victoria Wood, Associate Solicitor for Longmores for preparing the above article.
For further information:
If you wish to know any more about any of the tax reliefs discussed please contact Longmores, Victoria Wood, Associate Solicitor, email: victoria.wood@longmores.law, telephone: 01992 305244
If you would like to make a gift to support the work of HCF please contact Amanda Jansen, Head of Philanthopy, email: amanda.jansen@hertscf.org.uk, telephone: 07711 143267