Gift Aid is one of the simplest and most effective ways of giving to LAMDA. For a donation to qualify for Gift Aid, you must be a UK taxpayer. You must pay at least enough Income or Capital Gains tax in the year of the donation as LAMDA will reclaim on your donations from HMRC.
Completion of a Gift Aid Donation Form allows LAMDA to reclaim the sum equal to the basic rate tax – currently an additional 25p for every £1 given.
Gift Aid only applies to the basic rate of tax (20%). However, if you pay a higher rate of income tax, either at 40% or 50%, after making a donation to LAMDA you can reclaim the difference between the basic rate of tax and the highest rate of tax you have paid. For example, if a higher rate tax payer (40%) donates £100, LAMDA will be able to claim £25 and the donor will be able to reclaim £25. Donors are able to donate their relief straight back to LAMDA through their self-assessment tax return.
As well as donating gifts of money, individuals can also help by gifting shares. This is one of the most attractive methods of minimising Income and Capital Gains Tax liability to the donor.
All shares that are transferrable can be donated to LAMDA, but only shares listed or dealt on a recognised stock exchange qualify for tax relief for the donor. These include shares listed on the London Stock Exchange or Alternative Investment Market Shares (AIM). Please visit the HMRC website f or a full list of qualifying stock exchanges.
There is the potential for you to claim income tax relief on the value of the shares at the rate of tax paid. For example, if you pay Income tax at 40%, your Income tax bill could be reduced by 40% of the value of the donation. You are able to donate the tax relief straight back to LAMDA through your self-assessment tax return.
For donors whose employers operate a payroll giving scheme, any donation to LAMDA is automatically deducted from an individual’s gross salary before tax is paid. The benefits are two fold: higher rate taxpayers need not remember to reclaim relief through self-assessment, and the donation costs the donor less, as it is taken out of pre-tax earnings.For example, if you are a standard rate taxpayer (20%), the immediate tax relief means that a donation of £10 will cost you just £8. Corporate matched giving programmes are also a very favourable way to further increase the ultimate value of a gift to LAMDA.
LAMDA pays no tax on gifts of money or property bequeathed by a legacy. In addition, a bequest to LAMDA may have tax benefits for your estate by reducing the amount liable for Inheritance Tax. Legacies are exempt from inheritance tax (which at the time of writing is 40%), so it may help reduce the amount of tax payable if your estate is over the exempt threshold.
From April 2012, a reduced rate of inheritance tax of 36% for estates leaving 10% or more to charity will be introduced, as announced in the 2011 Budget.
Transfer of Assets / Gifts ‘In Kind’
The gift of a capital asset such as a work of art, a collection or other property can be made to LAMDA without any Capital Gains or Inheritance Tax Liability being incurred. In addition, no tax would be payable by LAMDA if the value of the asset was subsequently realised.
Donations in-kind of all sorts of things, including musical, office or other relevant equipment, can all be very helpful to the school, and can be discussed on a case-by-case basis.
(Last updated 25.10.11)