Giving Gifts of Securities to the University of Durham

The new laws of Charitable Giving introduced in 2000 allow personal tax relief on gifts of Shares and Securities to Charity.

What Tax Relief is available?

Income Tax Relief

The donor will receive income tax relief at her/his highest marginal rate. A gift of £10,000 of shares would reduce the donor's effective taxable income for that year by £10,000, resulting in a saving of £4,000 to a Higher Rate Taxpayer.

Capital Gains Relief

Your gift will be entirely exempt from Capital Gains Tax (CGT). Additionally, if you have not paid enough Income Tax to benefit from all the relief on your gift, but you do have CGT liability, then your gift will reduce your CGT liability.

Corporation Tax Relief

If the gift is made by a company then the company can claim corporation tax relief up to the value of the shares.

Summary

The total value of your gift will reduce the sum of your Income Tax and Capital Gains tax liability at your highest marginal rate. There is no further tax relief for the Charity.

Which shares can be treated in this way?

Any shares or securities listed on the London Stock Exchange and any stock exchange outside the UK approved by the Inland Revenue for tax purposes under Section 841 ICTA. An up-to-date list of such stock exchanges is available from the Development and Alumni Relations Office, but broadly it covers most European and US exchanges including NASDAQ, as well as a number of Asian and South and Central American Exchanges. 

Note that the tax relief is only available against UK taxable income or Capital Gains.

Calculating the value of your gift

Establish the value of the shares

For shares on the London Stock Exchange Daily Official List, the share price will be either:

• The lower of the bid and offer prices, plus one quarter of the spread
  

• The mid-point between the highest and lowest prices at which bargains were done on the day, excluding any bargains at special prices.

For other shares or securities:

• The price the shares might reasonably be expected to have fetched on a sale on the open market.

Add any dealing / transfer costs

The shares will be transferred directly to the charity: please do not sell them! But your broker or company registrar may charge you for the transfer. If they do then the cost of this transfer can added to the notional value of the shares sold.

Transferring the shares to the University

Your shares may be held in your own name, or they may be held in the name of a nominee company. You may or may not have certificates for them. You may need advice from your stockbroker or bank about how your shares are held if you are not sure. 

You need to arrange for the shares to be transferred to the University yourself. The University broker can assist with this process so please contact Gill Lowing, Operations Manager, and we will put you in touch with them.