Legacies and Reducing Inheritance Tax:

In the UK, gifts to charity are currently exempt from Inheritance Tax and the government provides a further incentive when you leave 10% or more of your net estate to charity.

What is Gift Aid?

Gift Aid is a UK government scheme which allows charities to increase the value of donations received. If you are an eligible UK taxpayer, charities can claim an extra 25p for every £1 donated, with no additional cost to you. 

For example, if you donate £10, and are eligible for Gift Aid, the Princethorpe Foundation should receive £12.50 which means your generosity goes even further.

Am I eligible for Gift Aid? 

To be eligible for Gift Aid you must be a UK taxpayer and have paid, or expect to pay, sufficient Income Tax or Capital Gains Tax in the relevant financial year to cover the Gift Aid claimed on all of your donations to charity. 

Your donations will usually qualify as long as they are not more than 4 times the amount you have paid in tax in the relevant tax year (6 April to 5 April). The tax could have been paid on income or capital gains tax. You must tell the charities you support if you stop paying enough tax. 

How do I know if I am a UK taxpayer?

You are usually considered a UK income taxpayer if any of the following apply to you:

• Tax is taken from your wages or pension before you receive them
• You fill in a self-assessment tax return to HMRC each year
• You have any taxable savings (e.g. in a building society), a pension plan or investment income

You may have also paid Capital Gains Tax on the sale of a property or shares, for example. Please note that Inheritance Tax does not count as Income or Capital Gains Tax.

How do I sign up for Gift Aid?

Signing up to Gift Aid is simple, you just need to complete a declaration with each charity that you donate to. You will need to provide your full name and address which will be used by HMRC to identify you. The Gift Aid declaration contains a statement to confirm that you are a UK taxpayer and you understand your responsibility to cover the difference if there is a shortfall between the amount of Gift Aid to be claimed and the amount of tax you have paid in the relevant tax year.

Complete an online declaration for The Princethorpe Foundation. You can also tick the box on our online, or paper donation forms. Additionally, we are able to take a verbal declaration over the phone and we will confirm this to you in writing.

What if I am retired and receiving a pension?

As a retired individual, you can still participate in the Gift Aid scheme as long as you have paid enough tax to cover the amount of Gift Aid charities are claiming on your donations. This could include tax on:

• Private pensions: If you receive a private pension and tax is deducted
• Savings: Tax paid on interest from savings accounts
• Capital Gains Tax: If you have sold assets like property or shares at a profit and have paid Capital Gains Tax.

Can I withdraw my declaration on a specific gift?

Yes, this is no problem. This could be because you know that you will not be paying enough tax in the year to cover the Gift Aid amount on that donation. If this is the case, please contact us via email at makingadifference@princethorpe.co.uk. 

Please remember, if a declaration exists, it is the donor’s responsibility to inform the charity not to claim Gift Aid if applicable. If we have a declaration, the Princethorpe Foundation will continue to claim Gift Aid on your donations until you tell us not to.