Can I claim tax relief on charitable donations?

If you give money or certain other assets to charity, you or they may be able to claim tax relief. This can reduce your overall tax bill and/or increase the size of the donation.

Gift Aid

Under the government’s Gift Aid scheme, any charity or community amateur sports club you donate to can claim a further 25p from the taxman for every £1 you give.

To donate via the Gift Aid scheme you will usually need to fill out a form which should be provided by the charity in question.

In order to qualify for Gift Aid, your donations must be no more than four times what you have paid in income tax in the current financial year.

If you are a higher- or top-rate taxpayer, you can claim the difference between your rate and the basic 20% rate of income tax. This can be done through the self-assessment system or by asking HM Revenue & Customs to alter your tax code. In this case, you should keep records of your donations for at least 22 months after the end of the tax year in which they were made.

Find out more about Gift Aid. 

Payroll Giving

Your employer or may run a Payroll Giving scheme: this takes any charitable donations you wish to make out of your salary before it is taxed, which means you pay no income tax on the money you give.

Personal pension providers may offer the same option.

Read more about payroll giving. 

Giving other assets

It is possible to donate land, property or shares to charity and get both income and capital-gains tax relief.

You can deduct the value of the gift from your total taxable income in order to pay less income tax. Any capital gains you make on land, property or shares you give to charity is exempt from capital-gains tax.

Bequests to charity

If you leave money or other assets to charity in your will, these donations will either be free of inheritance tax or, if more than 10% of your estate is left to charity, reduce your overall inheritance tax rate.

At the moment, inheritance tax at 40% is payable on any proportion of an estate over £325,000 in value. So if someone died with an estate worth £350,000 but left £25,000 or more to charity, no inheritance tax charge would be incurred.

Read more about leaving money to charities in your will.