Blog – July 2021

One of the biggest life lessons for us from the last 12 months is to be grateful and appreciative for what you have, your health and the people around you.

It has been a tough year for everyone in many different ways but some people have been challenged more than others. It has brought home just how many people in society can find themselves in need of help at times.

There have been many heart-warming stories during the pandemic about the people, companies and communities that have given help — whether their time, food, shelter, money or something else.

I think we will all fondly remember the most well-known example of this with Captain Tom and his marvellous fundraising efforts for the NHS. He not only raised an astonishing amount of money but boosted the morale and spirit of a whole nation.
There are many benefits of charitable giving beyond the obvious benefit of helping those who need it most. As well as the feel-good factor, the benefits can also include tax relief – depending on the donation and how you make it.

You can get tax relief on gifts to UK charities if you give:

• Under Gift Aid;
• Through a Payroll Giving scheme, run by your employer, or;
• Gifts of certain land, property and shares.

Companies can also make monetary gifts to charity and gain tax relief, although there are some conditions that need to be met to obtain the corporation tax relief.

Some employers offer an uplift or matching system where they increase a contribution – this can make a huge difference to the amounts being donated and is always worth investigating.

There can also be a saving of Inheritance Tax – if you leave something to charity in your will, it won’t count towards the total taxable value of your estate, which is called leaving a ‘charitable legacy’.

You can also cut the Inheritance Tax rate on the rest of your estate from 40% to 36%, if you leave at least 10% of your ‘net estate’ to a charity.

At Life Financial Planning we have been supporting the Openwork Foundation which has been celebrating its 40th birthday this year. In this time the foundation has helped over 1,000 charities and have donated over £20 million to help make a difference to the lives of many vulnerable people.

So, making charitable contributions is not only a great way to help others in need but can help save tax for you personally, for your family, or through your company.

Please note, the FCA does not regulate tax planning.

Stay in touch and sign up to our free newsletter