If you’re dithering about whether to donate cash now or after April 5th – we say act fast
The financial year is drawing to a close, and Prism the Gift Fund have put together a recommended checklist to make sure your donations and philanthropic intentions are the best value for money in the run up to 5 April:
> If you’re dithering about whether to donate cash now or after April 5th – we say act fast: Higher rate income tax is coming down from 50% to 45% – this means that the amount you can claim back from any gross donation using Gift Aid will decrease from 30% to 25%. On a £100,000 donation, for example, your rebate will go down from £37,500 to £31,250.
> Income tax changes will also impact gifts of shares Gifts of shares come with no Capital Gains Tax liability, and also come with full Income Tax relief. If you are a 50% tax payer for financial year 2012/2013, you are eligible for tax relief at your highest rate of income tax on that donation. As the higher rate of income tax is coming down to 45%, the amount of income tax relief will go down as well.
> Even if you don’t know where you want to donate now, there are ways of getting the tax relief and making that decision later Prism the Gift Fund’s Donor Advised Fund allows donors to commit funds to charitable means without necessarily knowing what the end charities are going to be. Prism the Gift Fund acts as a holding charity, so donors can claim tax relief when the landscape is favourable (now) and gift onwards from their pot when a cause catches their eye. This flexible vehicle is perfect for a time like this.
> Gift Aid can be claimed against earnings from the previous tax year If you do decide to wait a while, and are planning on donating cash, all may not be lost. Gift Aid can be claimed against earnings from the previous financial year. Until you file your tax return for 2012/13 and provided that you have income at those higher rates, you may still be able to claim 30% on gross Gift Aided donations.