Touching Lives - June 2007
Even fairer shares
However, there is an additional saving on a gift of shares in the form of capital gains tax relief. Similar relief also applies if you wish to donate land or buildings. No capital gains tax is payable on any increase in the value of the shares donated. In theory this could mean a further ‘saving’ of up to 40%. However, where shares have fallen in value the loss cannot be used to offset a capital gains tax liability.
If you are a basic rate taxpayer, a gift of £1,000 of listed shares could reduce your income tax bill by £220 and by £400 if you are a higher rate taxpayer. This effectively means the donation has only cost you £780 or £600, respectively, and you are helping Action Medical Research to fund much needed projects to further the treatment of a wide range of conditions.
If you need advice on personal tax issues we recommend that you speak to a financial advisor or contact the Inland Revenue helpline on 0845 302 0203, or visit their website www.hmrc.gov.uk