Charitable Giving: An Effective Strategy for Tax Reduction
Three methods to minimise your tax liability ...
Posted by Helen Beaumont on 10/05/2023 @ 8:00AM
In the realm of tax reduction, charitable giving can play a key role. There are three primary methods through which your contributions to charitable organisations can assist in diminishing your tax liability ...
Seek professional advice to ensure your tax planning and tax reduction align with your personal circumstances!
Each of these methods offers a different way to support the causes you care about while also potentially reducing your tax liabilities.
Gift Aid - This scheme is advantageous for reducing your income tax or capital gains tax. When you make a donation through Gift Aid, the charity can claim an extra 25p for every £1 you give. This means that your £1 donation is, in effect, worth £1.25 to the charity. Additionally, if you pay tax above the basic rate, you can claim the difference between the rate you pay and the basic rate on your donation.
Payroll Giving - Also known as Give As You Earn (GAYE), this method enables you to donate directly from your salary before tax is deducted. This means that you only pay tax on the remainder of your salary, effectively reducing your income tax.
Legacy Donations - By leaving a charitable donation in your will, you could potentially reduce your inheritance tax. If you leave at least 10% of your "net estate" to a charity, you can cut your Inheritance tax rate from 40% to 36%.
As always, it's advisable to seek professional advice to ensure your tax planning and tax reduction align with your personal circumstances and goals.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about charitable giving for tax reduction purposes, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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