This opportunity is aimed at people across Norfolk who own shares which they are not sure what to do with or wish to make tax efficient charitable donations. Many individuals may have inherited small parcels of shares from a relative or received shares following a company privatisation or take over. Such small amounts of shares are often difficult or even impossible to dispose of, not least due to the costs involved.

Alternatively, you may have a large investment portfolio but limited liquid cash resources yet wish to make a charitable donation.

Norfolk Community Foundation has teamed with Barratt & Cooke to help you solve this problem. Even if you have just one or two shares we can help, by providing a mechanism for disposing of shares, and in a charitable way which is both easy and effective. Surely it makes sense to put these to good use by donating them to Norfolk Community Foundation?

Benefits of Share Giving

Donating shares to support our work is a simple way to help those most in need in Norfolk. It is also one of the most tax efficient ways to give money:

  • You won’t have to pay any capital gains tax on the shares you donate
  • You can claim income tax relief on the market value of the shares at the date you donate them to NCF through your tax return
  • Higher rate taxpayers will be able to claim income tax relief equal to 40% of the value of the gift.
  • Additional rate taxpayers will be able to claim tax relief equal to 45% of the value of the gift.
  • There is no cost to you of donating the shares – We cover your costs through this scheme.
  • The process is quick and easy with the minimum of form filling.

In order to qualify for the tax relief, the shares or securities must be:

  • Listed or dealt on a recognised UK stock exchange
  • Units or shares in certain UK authorised unit trusts or open-ended investment companies.

Points to note

  • Barratt & Cooke are our dedicated stockbroker for this activity, who will help make the transfer – at no cost to you
  • As a charity we are not able to claim Gift Aid on share donations
  • Norfolk Community Foundation will sell the shares and re-invest the funds in accordance with our investment mandate and charitable purposes.

Case study 1 – Small shareholdings

If you hold a number of small share holdings, say from demutualisations or similar, such as National Grid.

The holdings are probably small and low value and therefore are not worth selling as the costs of sale are too high.

You probably receive a few dividends each year, all for very small amounts, but you still need to make sure you are paying the right amount of tax on these and that is a hassle.

You get a few pieces of correspondence each year too, which you have to check in case any action is required.

The shares are more trouble than they are worth and you would really like to tidy up your tax affairs by getting rid of them.

Gift them to NCF, who deal with all the transfer documents with the help of their stockbroker Barratt & Cooke. You just need to fill in a couple of quick and easy forms.

  • The transfer does not cost you anything
  • It is quick and simple to complete
  • There is no tax payable on any capital gain
  • You can claim income tax relief on the market value of the shares gifted at the date of transfer. So for a basic rate tax payer this would save you 20% of the value in tax and for a higher rate tax payer it would be 40%
  • You get the feel good factor from donating to charity and helping to make a difference to the lives of those in Norfolk with the most need.

Case study 2 – You are making regular donations to charity already and have a share portfolio

We all try to do our bit for charity by making regular donations to charities that are close to our hearts. These contributions often add up to a few hundred or thousand a year.

If this is you, why not think about making those donations by way of shares to benefit from the Capital Gains tax relief available. NCF will use those shares to support local charities.

For example:

  • Gift aid donations
    • You donate £2,000
    • The charities receive £2,500 including gift aid
    • If you are a basic rate tax payer you don’t get any tax relief on this contribution, in fact you will need to pay tax if your tax bill is below the £500 gift aid relief the charity can claim
    • If you are a higher rate tax payer you will get 20% tax relief on the gross contribution, so a saving of up to £500
  • Gift of shares
    • You donate £2,500 of shares – the charity is not able to claim gift aid
      • If you are a basic rate tax payer, you will get income tax relief up to £500 on the donation
      • If you are a higher rate tax payer, you will get income tax relief up to £1,000 on the donation
      • No Capital Gain Tax payable, so even if you have used your annual Capital Gains Tax allowance you don’t need to worry.

So in summary to achieve £2,500 in the hands of the charity:

  • A cash donation of £2,000 will cost you £2,000 as a basic rate taxpayer or £1,500 as a higher rate tax payer
  • A gift of shares will cost you £2,000 as a basic rate taxpayer and £1,500 as a higher rate tax payer, but with the big advantage you benefit from realising a Capital Gain tax-free. You also free up £2,000 of cash!
  • The gift of shares is also helpful to your Investment Advisor as it helps them to manage any gains in your share portfolio.

Case Study 3 – Big donations big tax savings

If you would like to make large one off donations to charity and have significant income and private wealth, think about how you structure the donation to maximise tax savings and minimise the impact on your personal cash-flow.

Income you earn between £100k and £123,700 is taxed at an effective rate of 60% due to the loss of your personal allowance. You could avoid this horrific rate of tax with some good planning.

For example:

  • You have income of approximately £125k per annum, from pensions and investments
  • Your share portfolio has large capital gains
  • You want to make a donation of £50k to charity
  • You have some shares in mind, current value £50k, capital gain £20k

If you make the donation to charity by way of shares:

  • You will achieve an income tax saving of approximately £25,000
  • You will achieve a Capital Gains Tax saving of £1,660

In summary:

  • You have reduced your tax bill by approximately £26,660
  • Not had to part with any cash
  • Have made a significant contribution towards supporting local charities in Norfolk that make a difference to the lives of those in need every day.

What will Norfolk Community Foundation do with donated shares?

We will build an endowment fund that will benefit local charities in Norfolk, now and in the future.

Shares worth less than £25,000:

  • The share donation will be used to build an endowment fund for Norfolk
  • Building the endowment provides a regular flow of money to charities now, and in the future
  • Norfolk Community Foundation will sell the shares and re-invest the funds in accordance with our investment mandate and charitable purposes
  • The natural income from these investments will be distributed to local charities and community groups as directed by our strategic grants panel.

Shares worth more than £25,000

For gifts of shares over £25,000, you could speak to us about setting up a bespoke fund to address issues in Norfolk which you care about most.

How to donate

Scan & Email

Download and complete the Gifting Proforma. Scan this together with your share certificates, share statements and other relevant information then email it to accounts@norfolkfoundation.com

We will then email you the relevant transfer forms for you to print, sign and return to us, together with the documents originally scanned.

Post

Please complete the Gifting Proforma and send it to us with the share certificate(s) that you want to donate, along with identity documents to:

Joanne Dale
Finance Manager
Norfolk Community Foundation
St James Mill
Whitefriars
Norwich
NR3 1TN



FAQs