Tax Benefits of Being Charitable

06 March 2013

Charitable giving is a good way to help charities and can also be beneficial to both individual tax payers and companies.

What are the favourable tax benefits available for gifting money to a 'qualifying' charity?

Income Tax
If you are self-employed, charitable giving is through the Gift Aid scheme, and there is tax relief provided you pay Income Tax equal to the amount of tax reclaimed by the charity.

By giving to charity you will extend your basic rate Income Tax band by the gross amount gifted to charity. This reduces the amount of income charged at higher rates of tax of 40% and 50% and means more of your income will be taxed at 20%.

Corporation Tax
Gifting money to a 'qualifying' charity from a company is tax deductable from the total profits of the company when calculating any Corporation Tax Liability.

Inheritance Tax
Any gifts made to a 'qualifying' charity, during your lifetime or in your will, will be exempt from Inheritance Tax. If you leave at least 10% of the chargeable value of your estate to a qualifying charity, you will benefit from a reduced rate of Inheritance Tax of 36% instead of the normal 40% rate.

If you would like more information on charitable giving, please contact Sam Park on (028) 3832 4924 or by email sam@dalypark.com .

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Northern Ireland BT34 1DN
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