What are the tax reliefs available for donating assets to charity?

Supporting a charitable cause can benefit both the recipient and the donor. While many people are familiar with the tax relief available on cash donations through Gift Aid, fewer realise that donating assets such as land, property or qualifying shares can also offer significant tax advantages.

Understanding the available reliefs can help individuals make tax-efficient charitable donations while supporting causes that matter to them.

Which charitable donations qualify for tax relief?

If you donate land, property or qualifying shares to a UK charity, or sell these assets to a charity for less than their market value, you may be eligible for valuable tax relief.

Qualifying donations can provide relief from both Income Tax and Capital Gains Tax (CGT), making them an effective option for individuals looking to support charitable organisations while managing their tax position.

It is important to note that Income Tax relief is not available for gifts of assets made to Community Amateur Sports Clubs (CASCs), although different tax rules may still apply.

How Income Tax relief works

Income Tax relief is generally claimed by deducting the value of the qualifying gift or discounted sale from your total taxable income for the tax year in which the donation is made.

For individuals who complete a Self Assessment Tax Return, the claim is made through the ‘Charitable giving’ section of the return.

Those who do not submit a tax return may still be able to claim the relief by contacting HMRC directly. Depending on their circumstances, the relief may be received as a tax repayment or through an adjustment to their tax code.

Capital Gains Tax relief

In addition to Income Tax relief, qualifying gifts of land, property and shares to charity are generally exempt from Capital Gains Tax.

Where an asset is sold to a charity for less than its market value, any capital gain is calculated using the amount actually paid by the charity rather than the asset’s full market value. This can significantly reduce, or even eliminate, a potential CGT liability.

For individuals holding investments or property that have increased substantially in value, charitable gifting can therefore form part of an effective tax planning strategy.

Inheritance Tax relief

Gifts to UK charities are also exempt from Inheritance Tax, whether made during an individual’s lifetime or left to charity on death. In addition, where at least 10% of an individual’s net estate is left to charity on death, the rate of Inheritance Tax applying to the taxable estate can be reduced from 40% to 36%.
As a result, charitable giving can form an effective part of wider estate planning as well.

Keep accurate records

As with many tax reliefs, maintaining accurate records is essential.

You should keep documentation confirming that:
• The charity accepted the gift or discounted sale.
• The asset transferred qualifies for relief.
• Any agreed sale value is clearly documented.

Where a charity asks you to sell an asset on its behalf before donating the proceeds, you should also retain evidence of the charity’s request alongside records of the donation. This helps demonstrate that the transaction qualifies for tax relief and can help avoid unnecessary tax liabilities.

Planning charitable giving

Donating assets to charity can be an effective way to support good causes while making use of valuable tax reliefs. However, the rules can be complex, particularly where high-value property, investment portfolios or Capital Gains Tax planning are involved.

Taking professional advice before making significant charitable gifts can help ensure donations are structured in the most tax-efficient way while achieving your personal and financial objectives.

How Moore South can help

Whether you are considering gifting shares, property or other qualifying assets, understanding the available tax reliefs is an important part of effective financial planning.

At Moore South, our tax specialists provide practical advice on charitable giving, Capital Gains Tax planning and wider tax-efficient wealth planning. We can help you understand the reliefs available and ensure your donations are structured in line with current HMRC rules.

If you are planning a significant charitable donation and would like tailored tax advice, please get in touch with our team.