Donating your pay and donating shares

Giving Shares

You may be surprised to discover that giving shares is one of the most tax-efficient ways to make a donation. Not only do you save income tax and capital gains tax on the equivalent amount, it is very likely that the shares are worth more to us than they are to you.

Since the March 2000 budget, a gift of shares to a registered charity entitles the giver to relief from Income Tax equal to the full market value of the shares on that date. In other words, if a higher rate tax payer gives £1000 worth of shares to Seafarers, he or she will receive income tax relief worth £400. The donation is also exempted from Capital Gains Tax, so the value of the shares to us will be higher than it would have been had you sold them yourself.

Practicalities

Gifts of shares can be transferred to Seafarers UK by completing a Crest Transfer form for each share holding and returning it to us together with the share certificates. The transfer can also be made electronically if your shares are held by brokers under the Crest system.

In order to qualify for tax relief, the shares or securities must be:

• listed or dealt on a recognised stock exchange or
  
  
• units in authorised unit trusts or
  
  
• shares in a UK open-ended investment company or
  
  
• holdings in certain foreign collective investment schemes.

If your share holding is a larger one, you may be concerned about the effect of large-scale disposal on share value. In that case, there are two popular options:

• You can make the donation in a controlled manner over a long period. This may well be advisable for personal tax reasons too: the tax relief on share giving is not allowed to become a tax credit.
  
  
• You can attach instructions to your donation specifying when the shares can be sold. We will then simply hold on to them until the date you specify.

Small gifts

Please don't be put off if your share holding is quite small: share giving is a particularly sensible way to make use of a smaller holding, where the cost of trading the shares can often be too large to make the transaction worthwhile. You can give your shares to Sharegift, specifying that the donation is intended for Seafarers UK, and they will combine your gift with many others to minimise the administrative costs of selling them. Once again, your shares can be much more valuable as a donation than they would be if you kept them.

Payroll Giving

Payroll giving(also known as Give as You Earn or GAYE) is a tax free way of making regular donations to Seafarers UK. This is the most cost effective way to make a regular donation to us, and it will help us to plan for the future.

How Payroll Giving Works

Each time you are paid, a donation is deducted by your payroll department before tax is calculated.

For instance if you are a basic rate tax payer:

• If you pledge £5 per month
• You only pay £3.90
• The taxman will pay £1.10 at no cost to you

Setting up a Payroll Giving Donation

Check with your payroll department that your company offers the Payroll Giving Scheme, it easy for them to set one up, if they haven’t already.

Remember that the amount you pledge will include the part the taxman will contribute.

For more information about Share Giving or other ways of supporting Seafarers, please contact Kate Spanier 
on 020 7933 5978 or kate.spanier@seafarers-uk.org. You can also write to us at 8 Hatherley St, London SW1P 2QT.