How the tax relief works

There are two elements: income tax relief and exemption from capital gains tax.

Gifts of shares qualify for IT relief (at your highest marginal rate) equal to the market value of the investments on the day the gift is made, including associated costs such as broker fees. Tax relief can be claimed for the year in which the gift is made.

Example:

A gift to the Latymer Foundation of £10,000 worth of shares made by an individual who is a basic rate tax payer would reduce his or her IT by £2,000 for the year; the same gift would reduce a 40% taxpayer’s IT by £4,000 and from 2010/2011 would give a £5,000 reduction for those with taxable income over £150,000. Additionally, the donor would not have to pay any CGT on any increase in the value of the shares since they were acquired. If the shares have gone down in value, however, it is not possible to use this loss to offset any other CGT liabilities.

tax rate: 40%         45%

Value of shares donated to Latymer

(with a chargeable gain of, say, £4,000)                                         £10,000     £10,000

Donor deducts the £10,000 from

annual income liable to tax

(assuming a 40% & 45% tax rate)                                  tax saving: £4,000      £4,500

Donor saves a further 28% of CGT, which would

have been paid on selling the shares                               tax saving: £1,120     £1,120

Net cost to donor                                                                                £4,880     £4,380

Latymer receives                                                                                £10,000   £10,000

Donors should normally claim their tax relief by completing the appropriate section of their tax return. If they are not sent a tax return or they want to claim relief before the end of the tax year, they should contact their tax office giving full details of the gift, and the office will arrange for the relief to be given.

The examples provided are for illustrative purposes only. The tax benefits you may be entitled to will depend on your personal circumstances. You should always seek advice from your tax adviser.

The Inland Revenue (www.hmrc.gov.uk/index.htm)| may be a useful starting point.

• Upon receipt of your Share Donation Form, Latymer’s stockbroker will contact your stockbroker to arrange the transfer.
• Unless advised to the contrary in advance, it is our normal policy to sell all shares donated upon receipt to free up the funds to support its relevant activities immediately.

• Relief is available for gifts of:

– 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 recognised foreign stock exchanges

– units in an authorised Unit Trust (AUT)

– shares in a UK Open-Ended Investment Company (OEIC)

– securities on the Plus-Listed market operated by PLUS markets plc (but not the Plus Traded or the Plus Quoted markets)

– holdings in certain foreign collective investment schemes – generally schemes set up outside the UK that are similar to AUTs and OEICs

– land and property in the UK

• you do not need to be resident in the UK to benefit from this relief, so long as you pay sufficient UK IT and/or CGT to cover the relief.

If you would like to talk to someone about donating shares to the Latymer Foundation, please contact Megan Bruns