Individuals can benefit from tax relief by donating certain shares, securities and investments to Yorkshire Cancer Research. You can get this income tax relief, in addition to the capital gains tax relief on gifts of assets to charity.

Companies can get corporation tax relief for gifts to charity of the same types of investments. Companies can get this relief in addition to relief from corporation tax on capital gains on gifts to charity of shares, securities and other assets.

You can claim tax relief if you give, or at least sell at less than market value, these investments to Yorkshire Cancer Research (YCR's investment advisors will advise YCR on whether to buy any particular investments).

In order to guarantee accuracy, the following information has been taken direct from the Inland Revenue website. Use the links at the bottom of this page to go to their website for further information and examples. Information is given as a guide only, at the time of writing.

What is a ‘qualifying investment'?

The following investments qualify for the tax relief.

• Shares and securities listed or dealt in on the UK Stock Exchange, including the Alternative Investment Market
• Shares and securities listed or dealt in on any overseas recognised stock exchange
• Units in a UK authorised unit trust (AUT)
• Shares in a UK open-ended investment company (OEIC)
• Holdings in certain foreign collective investment schemes. (Broadly, these are schemes established outside the UK that are equivalent to unit trusts and OEICs.)

If you are not sure whether an investment will qualify, you can contact the Inland Revenue at the following addresses

For England, Wales and Northern Ireland

Inland Revenue (Charities)
St John’s House
Merton Road
Bootle
Merseyside
L69 9BB

Tel: 0151 472 6043/6046 (Gifts of shares/securities)
Fax: 0151 472 6268/6060

For Scotland

Inland Revenue (Charities)
Meldrum House
15 Drumsheugh Gardens
Edinburgh
EH3 7UL

Tel: 0131 777 4040 (All enquiries)
Fax: 0131 777 4045

How do I make a gift of shares to Yorkshire Cancer Reserach?

You should first contact our chief executive, Elaine King, to ensure that we can accept the proposed gift. If we can, you then need to sign a transfer form to take the shares out of your name and put them into our name. You can get a transfer form by contacting the registrars of the company. Their details will be on your share certificate and on your dividend vouchers. The registrars will be able to answer any questions about filling in the form.

YCR may also be able to help you with the transfer procedure.

Our investment advisors will advise us on whether to sell the shares immediately or add them to our investments portfolio.

How do I calculate the relief?

If you are making the gift as an individual, you should deduct the relief when you calculate your income for the tax year in which you make the gift of shares or securities. A tax year runs from 6 April in one year to 5 April in the next.

Companies should deduct the relief as a charge on income for the accounting period in which they make the gift.

The amount you can deduct is

• the market value of the investments at the date of the gift to charity,
  plus
• any incidental costs incurred in transferring the investments (such as broker’s fees or stamp duty),
  less
• any disposal proceeds or other money, or the value of any other benefits you, or a person connected with you (such as a relative), receive in consequence of you giving or selling the investments to charity.

How do I claim the relief?

You can claim relief by

• completing the appropriate section of your Self Assessment return,
  or
• requesting that your PAYE code is amended for the current tax year,
  or
• requesting that your Self Assessment Payments on Account are reduced.

If you are not sent a Self Assessment return at the end of the tax year, or if you want to claim relief before the end of the current tax year, you should write to your Tax Office, giving full details of the gift, in order to claim the relief.

Companies should include the amount of the relief they are claiming in the ‘Charges Paid’ box on their Corporation Tax Self Assessment return.

What evidence of the gift will I need?

You will need some evidence of the transfer of ownership of the investments, such as a dated copy of the transfer form or some other dated document irrevocably giving the investments to the charity. This is important because the shares will come out of your name on the company’s register at a later date, by which time the value of the shares may have changed. You may also continue to receive communications, including dividends, from the company until the transfer has been registered.

What date should I take as the date of the gift for the purpose of establishing the market value of the investments?

The date on which the investments are transferred to YCR. In the case of shares and securities, this is likely to be the date that you sign and hand over the stock transfer document.

For all the types of qualifying investment you are advised to establish the market value at the time you make the gift. This will be much more straightforward than trying to establish it later.

How do I establish the market value of the investments?

‘Market value’ means the price that the investments might reasonably be expected to sell for in the open market.

There are different rules for establishing the market value of different kinds of investments. Some basic rules are explained on the Inland Revenue website.

What if YCR asks me to sell the investments on its behalf?

If you contact us about making a gift of shares and we ask you to sell them on our behalf, you can do so. However, you will need satisfactory evidence (such as an exchange of letters) to show that you have made the gift of the investment to YCR and that we asked you to dispose of the investments on our behalf.

Otherwise, you may be treated as having made a disposal on your own account and the cash you give to YCR may be treated as a Gift Aid donation. This may also incur a capital gains tax charge.

Once the company registrar has received the stock transfer form and ownership has been transferred, you can no longer dispose of the shares for YCR.

How much relief will I get from capital gains tax?

The amount of capital gains tax or corporation tax that you would have paid if you had sold the shares, rather than given them to a charity, will depend on a number of factors. Please see the Inland Revenue leaflet CGT1 ‘Capital gains tax. An introduction’ for further details.

Is it better to sell the investments and give the proceeds to YCR using Gift Aid?

For companies, it will usually be better to give the shares to YCR. If no chargeable gain would arise on a sale then there is no difference between the two methods.

If you are an individual, it depends on your circumstances and whether you wish YCR or yourself to gain the greater benefit from the tax relief.

How to value different kinds of qualifying investments

Shares or securities quoted in the London Stock Exchange Daily Official List

You should use either

• the lower of the two quotations on the day in question plus one quarter of the difference between those two figures,
  or
• the mid- point between the highest and lowest prices at which bargains were done on the day, except for bargains at special prices
  whichever is the lower.

Bargains at special prices are clearly shown in the Daily Official List. You should not include them in the comparison of highest and lowest prices. (Bargains at special prices are now very rare.)

Inheritance tax

Outright gifts and bequests to charity are completely free of inheritance tax.

Capital gains tax

You are not liable to capital gains tax or corporation tax on capital gains when you make a gift of assets, such as land or stocks and shares, to charity. The Inland Revenue leaflet CGT1 ‘Capital gains tax. An introduction’ gives you more details about capital gains tax.

Links

Inland Revenue main page www.inlandrevenue.gov.uk

Inland Revenue Giving Shares and Securities to Charity page