Charity gifting

Gift Aid

If you pay UK tax, charities or Community Amateur Sports Clubs (CASC) are able to reclaim basic rate tax relief (20%) on your donation that you have already paid tax on.

Higher rate and additional rate taxpayers are able to claim back a further 20% and 25% back respectively of the gross donation via their self assessment tax returns.

You can use Gift Aid only if you have paid the equivalent in UK Income and/or Capital Gains tax during the tax year your donation is made.

Gifts left in Will

If your Estate is worth over of £325,000 at the time of your death, the excess will be taxed at 40%.

Any gift left to Charity or CASC will not be included when valuing your Estate for Inheritance Tax purposes. Gifts made to charity within 7 years before death are also exempt from Inheritance Tax.

If you leave at least 10% of the net value of your Estate to a ‘qualifying’ charity, any excess over £325,000 will be taxed at a reduced rate of 36% rather than 40%.

Gifting via Payslip

If you pay tax through PAYE and you wish to gift to charity, your donations to charity can be taken from your payslip or pension before any tax is deducted. The charity will receive tax relief at your highest rate of tax; if you are a basic rate tax payer, a £10 monthly donation will cost you £8.  If a higher rate tax payer, a £10 monthly donation will cost you £6.

Ward Williams Financial Services Ltd

Ward Williams Financial Services Ltd are also raising money for charity giving, Guy Campbell, our Trainee Financial Adviser, will be riding for Asthma UK this August in the Prudential RideLondon-Surrey 100 cycling event.  If you would like to make a donation to Asthma UK, his sponsorship page is uk.virginmoneygiving.com/GuyCampbell.

If you wish to discuss any of the above or any other Financial Planning issues with an Adviser, please contact us on 01932 830664 or visit www.wardwilliamsfs.co.uk

Child Benefit

Since January 2013 some households have been caught by the High Income Child Benefit Charge (HICBC). The charge works as a percentage and is simply calculated as any income received by an individual that is above £50,000 will result in paying a charge of 1% of the Child Benefit received for every £100 of income above that £50,000 base level. This charge is irrespective of whether the individual who receives the child benefit is the person earning the high income. So if your income is £57,000 your tax charge equals 70% of the Child Benefit received.

What counts as income?

The income considered is "adjusted net income" and includes all taxable income for the tax year in question, therefore salary, taxable benefits-in-kind such as a company car, (Net) rental income, and gross-interest will all count. However, there are deductions that are allowable in calculating the relevant "net" income, such as pension contributions or payments to charities.

Pension Contributions and Saving Child Benefit

Therefore in the above scenario a £57,000 salary could retain the child benefit by making a £7,000 pension contribution. BY including the tax relief received, the contribution would, in Net terms, cost only £3,454. Further guidance can be sought by visiting: https://www.gov.uk/child-benefit-tax-charge  

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