Gifts of Shares

About Gifts of Shares


Value of Gifts of Shares

One of the best-kept secrets in fundraising...giving shares can cost donors less than giving cash!

With our information and advice, you will find it is not as complicated as you may think. The average share donation is £7,000 and more than 11 million people in the UK own shares.

How do Gifts of Shares work?

When donors give shares to a charity, they can get substantial relief on their income tax bill, as well as exemption from Capital Gains Tax (CGT) on any gains they may have made on the shares. With the higher rate of income tax at 40% and capital gains tax at 18%, this can amount to a substantial tax break. As with Payroll Giving, all the tax relief goes to the donor.

While fundraisers do not need to be experts on shares or tax relief, it is a good idea for you to understand the basics. There are two types of tax relief available to donors who give shares: income tax relief on the value of the shares and exemption from Capital Gains Tax. It is the donor's responsibility to keep adequate records to enable them to claim their tax relief and to work out how much relief they are entitled to. Donors should claim their tax relief by completing the appropriate section of their tax return. If they are not sent a tax return or if they want to claim relief before the end of the tax year, they should contact their tax office for advice.

Policy on accepting shares as gifts

A charity should have a firmly established policy prior to embarking upon a campaign to solicit shares. For guidance on writing a policy, see the Institute of Fundraising's Code 'Acceptance and Refusal of Donations'.

This policy should cover two main areas:

1. Your charity's purpose and accepting certain types of company shares. Should your organisation accept a donation of shares in all companies? For example, some charities do not accept donations of shares in tobacco companies.

2. The practical considerations of accepting shares as a donation. While 11 million people are shareholders, the size of their holdings will vary. The transfer and sale of shares under a certain value may be uneconomical for the charity once brokers fees and administrative costs are taken into account.

ShareGift specialises in accepting small holdings of shares, and also helps people with larger gifts of shares for their favourite charities. ShareGift works with companies, stockbrokers, charities and other organisations across the UK to help with share donations.

http://www.sharegift.org/

The Share Certificate

The share certificate is a valuable document. It is the title to the property, (shares) much like a deed to a house. The most important information contained on the share certificate is the name of the undertaking (company which the shares are part of), number of shares, and the name of the owner of the shares.

It is important to note that the value written on the share certificate is not the actual value of the shares. Share prices, like house prices, go up and down. The amount of tax relief available will depend on the value of the shares when the donor acquired the shares and how much they are worth on the date of transfer. It is important to get advice on this area. Remember: Don't give financial or legal advice to donors.

Please see the specimen forms for an example.

The Stock Transfer Form

The Stock Transfer form need not be intimidating. It is simply a form that enables the Registrar of the shares, like the Land Registry, only for stocks instead of houses, to transfer the shares from the donor to your organisation.

It is likely that a donor who is in a position to give a substantial amount of shares, will be aware of how to correctly complete this form, or have financial advisers who can do it on their behalf.

However, charities should be familiar with the key points of this form. While Stock Transfer Forms will vary in appearance, there will be certain mandatory information that all forms will contain.

Please see the specimen forms for an example.

Promoting Gifts of Shares - FREE Downloads

 

In order to realise the potential of Gifts of Shares, it is vital to communicate its benefits to your donors, and build awareness within your organisation.

Our downloads page will help you get the message out about Gifts of Shares and also contains these useful newsletter and press release templates.

Gifts of Shares Template Article Tailor this article to your charity and include it in your next newsletter to donors.

Gifts of Shares Template Press Release Promote your Gifts of Shares success by tailoring this release to your charity and sending it out to your local press.