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Setting up a trust or foundation provides a framework for planning a donor's charitable giving in a systematic, planned way. Donors receive tax relief on their gifts to the trust and the trust itself will not incur tax on investment income, corporation or inheritance tax or business rates.
• What is it?
• What are the tax benefits?
• What are the reporting requirements?
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A charitable trust or foundation is a legal entity which can be set up by anyone who has decided that they want to commit to setting aside some of their assets or income for charitable causes. It does not require a substantial sum of money to set up a trust. Often the initial endowment is a lump sum from a bonus, an inheritance, or the sale of shares. But because a charitable trust is classified as a charity, it can receive money through tax-efficient giving methods - using Gift Aid, Payroll Giving or Share Giving, for example.
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Charitable trusts provide a number of tax benefits. Donors can reclaim tax on the value of their donations, and no tax will be charged on any investment income. No corporation tax or inheritance tax will apply, and the trust will be exempt from business rates if it eventually comes to run its own office. In addition, unless the trust is very large, it will not have to register VAT.
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The only external supervision comes from the Charity Commission. After initial registration, the trust is required to publish a formal report and accounts each year (including a list of the main organisations it has helped) and it must send the Charity Commission an annual return and report any significant changes.
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Template Press Release for Charitable Trusts and Foundations.
Promote your success by tailoring this release to your charity and sending it out to your local press.
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