UK Charities: Does gift aid apply to non-cash gifts?

What is gift aid? Gift Aid allows charities to increase eligible donations by 25% at no extra cost to the donor. A £100 donation becomes £125 to the charity.

Why the Charity Receives 25%

In the UK, the basic rate of income tax is 20%. Gift Aid treats donations as net of basic-rate tax. If a donor gives £80, the UK tax authority (‘HMRC’) treats it as £100 gross → £20 tax reclaimed → £20 is 25% of £80.

Does gift apply to gifts of property, land and buildings or other non-cash assets? Gift Aid only applies when an individual gives money to a charity. HMRC is explicit: Gift Aid cannot be claimed on donations of: • Land • Buildings • Shares (unless using the separate “Gift of Shares” relief • Goods • Services • Anything that is not a cash payment So the 25% uplift (HMRC paying £25 for every £100 donated) only applies to monetary donations.

What reliefs are available if someone donates property or land to a charity? There are two completely different tax reliefs, but neither is Gift Aid:

1. Income Tax relief: If an individual donates land or property to a charity, they can claim income tax relief as the market value of the property is deductible from taxable income. 2. Capital gains tax relief: From a capital gains tax perspective, the disposal is treated as no gain / no loss.

Are there any limits on donations? For the donor: • No upper limit on the value of land/property they can donate. • Relief is limited only by their taxable income (you can’t reduce income below zero). For the charity:

• No limit on the value of property it can receive • But the charity must: o Accept the gift formally o Ensure it is used for charitable purposes o Keep proper records o Consider whether accepting the property creates liabilities (repairs, insurance, rates or any performance obligations). Why Gift Aid doesn’t apply to property? Gift Aid is based on the premise that the donor has already paid income tax on the money they are giving. Property is not “post-tax income” — it’s a capital asset — so HMRC uses a different relief mechanism.