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<\/figure><\/div>\n\n\n\nAs we head towards the end of another tax year, the Community Foundation which provides donor services and advice on charitable giving in Northern Ireland is encouraging donors to give tax efficiently and add value to charitable donations. <\/p>\n\n\n\n
Commenting on this planned approach, Siofra Healy, Director of Philanthropy at the Foundation, says; <\/p>\n\n\n\n
\u201cI am regularly asked about the best way to make a charitable donation and this will generally depend on a number of circumstances; the person’s interests, values and motivations, amount they want to give, timeframe, intentions and causes they wish to give to, and their personal circumstances. Donors are increasingly savvy and people planning a special gift want to know that their donations are well managed and making an impact. This is where well-planned tax efficient giving can make a difference. For example, someone thinking of making a donation to a cause, doing so in a tax efficient way could increase the value of the donation, and in certain situations substantially reduce the tax bill.\u201d<\/p>\n\n\n\n
\u201cGift aid is the most widely known and used mechanism for tax efficient giving and if you pay income tax or capital gains tax, this government operated scheme enables registered charities to claim back 25p for every \u00a31 donated to that charity. As a donor, you need to make a gift aid declaration and ensure enough tax has been paid for the charity to make the claim. In addition, higher and additional tax rate payers can also benefit further<\/p>\n\n\n\n
Discussing the benefits of Gift Aid for higher and additional tax rate payers, Siofra adds; \u201cFirstly, the donor can claim back the difference between the basic tax rate (currently 20% plus rate paid, either 40% or 45%) and it is often surprising to higher and additional tax ratepayers that giving a \u00a35,000 donation to charity (at 40% tax rate) actually only costs them \u00a33,750 and the charity gains \u00a36,250, after gift aid is claimed.\u201d<\/p>\n\n\n\n
Secondly, a charitable gift could reduce the top rate of income tax, particularly if total income, before making a charitable gift falls marginally into the higher or additional rate tax band.<\/p>\n\n\n\n
The tax relief for higher rate tax payers is even more beneficial for those who fall into the \u201860% tax trap\u2019. There is a band of income that is tax free up to the annual personal allowance. If the adjusted net income exceeds \u00a3100,000 the personal allowance is reduced by \u00a31 for every \u00a32 of income in excess of this limit so someone with adjusted income of \u00a3123,700 or more will not be entitled to the 2018\/19 \u00a311,850 personal allowance. When this happens that slice of income between \u00a3100,000 and \u00a3123,700 is taxed at an effective tax rate of 60%. By making a charitable donation this will reduce the level of net adjusted income, so a person just above the \u00a3100,000 limit giving to charity could bring their adjusted net income below that limit, preserve the personal allowance, and effectively get tax relief on the donation at 60%.<\/p>\n\n\n\n
This concept of adjusted net income also applies to the High Income Child Benefit Charge which claws back child benefit via the tax system if either partner has adjusted net income of more than \u00a350,000. The child benefit is clawed back on a sliding scale until, at \u00a360,000, all child benefit is lost. Making charitable donations is one way of reducing the adjusted net income below \u00a350,000 so that child benefit is preserved. <\/p>\n\n\n\n
A lesser known fact about gift aid is that in some circumstances the opportunity exists for a donor to carry back a claim to the previous year. The decision to carry back has to be made on or before the self-assessment return for the earlier year and, in any event, before 31 January following that year so donations made between 6 April and the following 31 January can be carried back. <\/p>\n\n\n\n
\u201cI recently advised a donor who received a legacy and wanted to give this to the causes his loved one cared about. If the donation was made in one financial year it would have exceeded his gift aid capacity, but by using the carry back scheme, unused capacity from the previous year enabled him to give through the Community Foundation and for charities to receive maximum benefits,\u201d Siofra advises.<\/p>\n\n\n\n
A note of caution; not all donations are eligible for gift aid, anyone unsure should check with the charity or a tax advisor before making a claim or a declaration, e.g. company donations, donations on behalf of someone else, donations where no tax has been paid or where a benefit is attached are not generally eligible for gift aid. Siofra added that \u201cThe <\/p>\n\n\n\n
The amount claimed under gift aid by registered charities in the UK annually is substantial at over \u00a31.2b and goes a long way in funding the charity sector yet, HMRC have reported that \u00a3600m goes unclaimed every year! If you are eligible to claim gift aid and you haven\u2019t done so, imagine the impact and difference this could make to your favourite charity. <\/p>\n\n\n\n
Gifting of assets (shares, land and \/or property) is less popular however it is another great way to give tax efficiently and can often be a smart financial decision. Relief is available for \u2018qualifying investments\u2019, and land, where the asset is donated or sold to a charity at less than the market value. <\/p>\n\n\n\n
Individual circumstances can vary but it\u2019s worth noting and knowing that there is no capital gains tax payable on land, property or shares you donate to charity. In addition to the capital gains tax relief there can be a deduction from net income of the net benefit to the charity, plus incidental costs (broker or legal fees), less any disposal proceeds or other benefits received on disposal. With both capital gains tax relief and income tax relief applicable, this form of donation can be one of the most tax effective ways to give to a cause. Whilst only applicable to qualifying shares listed on a recognised stock exchange, and land, the actual rate of relief will depend on individual circumstances and differ depending on whether the shares are donated outright to charity, sold by the donor and the proceeds donated to charity, or sold at under market value to charity.<\/p>\n\n\n\n
\u201cUnlike gift aid, Tax relief through gifts of shares, land or buildings must be claimed within the year of the donation and cannot be carried back. Seeking advice from a tax expert is advisable as share giving can be flexible over many years, partly sold and partly donated or sold for capital gain and then gift aided over a number of years, depending on what works best for an individual\u2019s circumstance and the charities benefiting. Another consideration is that many charities, particularly smaller, local groups do not accept shares as donations and rather than forfeit this relief a donation through for example the community foundation may be an option. Studies have shown that tax reliefs are not a motivation in itself to give to charity and have little impact on a donors decision to give to a charity, however they do and can maximise a gift to charity and thereby encourage more generosity. Most donors want to maximise their giving and a planned approach can make a donation go further, but there is no one size solution to fit all and expert advice is crucial when it comes to higher earners and those with more complex tax arrangements,\u201d Siofra concluded.<\/p>\n\n\n\n\n\n\n\n
21 March 2019<\/strong><\/p>\n\n\n\n Business Person of the Year award presented to George Devlin from Abbey Upholsterers Ltd <\/strong><\/p>\n\n\n\n George Devlin from Abbey Upholsterers Ltd receives the Business Person of the Year award, sponsored by Ulster Bank, Carrickfergus at the recent Carrickfergus Business Awards. Organised by the Carrick Times in association with Mid and East Antrim Borough Council the awards celebrate all that is best in local business. The award winning furniture company, established by Georges father, George Sr in the early 1900\u2019s provides high end bespoke furniture product globally. The company, which employs over 120 staff across Northern Ireland and the UK has undertaken fit outs for a range of leading hotels including a recent \u00a3600,000 project for Galgorm Resort as well as projects for Claridge\u2019s Hotel in London and the Shelbourne Hotel in Dublin. Globally Abbey Upholstery delivers bespoke interior fit-out projects for a number of the world’s top luxury brands, combining chic style and stunning substance.<\/p>\n\n\n\n Commenting on winning the Business Person of the Year award, George said;<\/p>\n\n\n\n \u201cThis is a huge honour for the brilliant team who make Abbey Upholstery happen. Abbey Upholsterers\u2019 track record of delivering bespoke products to some of the biggest names in the hotel industry speaks for itself, and it\u2019s something I am personally really proud of. As a family-run business since early 1900\u2019s we work with a demanding sector to deliver unique joinery and upholstery solutions as well as interior fit-out services. Our reputation has enabled us to grow our market across the leisure sector including bars and restaurants in addition to private luxury residences \u2013 so this award, whilst presented to me, is really for everyone who has worked with Abbey to make us such a great local business success.\u201d<\/p>\n\n\n\n The 100% family owned company, overlooking the shoreline at Carrick, boasts over 90 years\u2019 providing high quality solutions. Created in its 100,000 sq. ft. factory, Abbey\u2019s work can be seen across Ireland, the UK and the world. <\/p>\n\n\n\n\n\n\n\n 5th March 2019<\/p>\n\n\n\n Abbey Upholsterers, based in Carrick, has appointed Judith Neill as Commercial Director<\/p>\n\n\n\n Abbey Upholsterers, based in Carrick, has appointed Judith Neill as Commercial Director to help develop and increase globally business sales. Previously an Account Manager working within the medical industry for over 17 years, Judith holds a Masters in Psychology, and is a Post Graduate in Mathematics. The award winning furniture company, which provides high end bespoke product globally, has undertaken fit outs for Hotels including a recent \u00a3600,000 project for Galgorm Resort as well as projects for Claridge\u2019s Hotel, London, the Shelbourne Hotel, Dublin. Globally Abbey Upholstery delivers bespoke interior fit-out projects for a number of the world’s top luxury brands, combining chic style and stunning substance.<\/p>\n","protected":false},"excerpt":{"rendered":" 28 March 2019 Community Foundation encourages charity donors to give tax efficiently and make the most of giving. As we […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-37033","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"yoast_head":"\n![\"\"](\"http:\/\/macklenew-com.stackstaging.com\/wp-content\/uploads\/2021\/05\/logo.png\"){kind=logo}
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