Share giving

Why donate shares to Rainbow Trust?

Simple and tax-efficient, donating shares can help transform the lives of families with a seriously ill child with practical and emotional support when it matters most.

Every day, amazing people like you make our work possible. If you are considering donating shares, you’ll be helping families to cope when their world is falling apart.

What are the benefits of share giving to you?

If you donate to Rainbow Trust by giving shares

  • You can claim full Income Tax relief on the value of shares
  • No Capital Gains Tax will apply, so you can maximise your donations at no extra cost

How does share giving compare to making a cash gift?

To qualify for tax relief, the shares must be HMRC qualifying shares for example listed or dealt on a recognised stock exchange.

How do I donate shares worth more than £500?

Our investment manager, Cazenove Capital will help make selling shares as easy and secure as possible. Please contact Karen to get the ball rolling.

The following examples set out the difference for the donor between selling shares and gifting shares:

  • Example 1

    Jane wants to donate £1,500 to charity and sells shares to do so

    Jane bought 100 shares in ABC Plc in March 2015 for £100. She is a clever investor as now in March 2019, those same 100 shares are now worth £1,500.

    Jane is a supporter of Rainbow Trust and would like to sell the shares and gift £1,500 to the charity. Jane asks her stockbroker to sell the shares for her. She pays the commission separately and the stock broker transfers the £1,500 to her bank account.

    Jane is a higher rate tax payer but is not subject to the additional rate of tax (currently 45%) and needs to complete her tax return. On her income tax return she declares her charitable donation of £1,500 and will be entitled to Income Tax relief on that sum at her highest rate of taxation (currently 40%). Jane can therefore claim £600 rebate.

    On Jane’s Capital Gains Tax return she needs to declare the gain of £1,400 on the sale of the shares. Jane has made other gains in the year and has used up her Capital Gains Tax allowance. She must therefore pay Capital Gains Tax (currently 20%) on the £1,400. Jane therefore owes £240 in tax.

    The balance for Jane on this transaction is therefore £600 minus £240 so she is due £360.

    The charity receives a £1,500 gift and, as Jane is a UK tax payer, it can claim Gift Aid at 25%, being £375. The balance for the charity on this transaction is £1,875

  • Example 2

    Janes wants to donate £1,500 to charity and does so by gifting shares with a current market value of £1,500 to the charity

    Jane bought 100 shares in ABC Plc in March 2015 for £100. She is a clever investor as now in March 2019, those same 100 shares are now worth £1,500.

    Jane is a supporter of Rainbow Trust and would like to gift these 100 shares to the charity. She speaks to Rainbow Trust who confirms that they can accept shares as a gift and asks her to fill in the Rainbow Trust share giving template.

    Jane is a higher rate tax payer but is not subject to the additional rate of tax (currently 45%) and needs to complete her tax return. On her income tax return she declares the share donation to the charity at the market value of £1,500 on the date they transfer. Jane is entitled to Income Tax relief on that sum at her highest rate of taxation (currently 40%) and Jane can therefore claim £600 rebate.

    Jane has not sold the shares and has therefore made no capital gain. There is therefore no Capital Gains Tax for her to pay on this transaction and the balance for Jane is £600. The charity is not entitled to Gift Aid on the donation of shares. The balance for the charity of this transaction is therefore £1,500.