shares

Donating Shares

The gift of shares can be of great value to the University as well as highly tax efficient option for our donors. It provides you with the opportunity to support a cause that matters to you, whilst also claiming substantial income tax relief.

Eligible shares include those listed or dealt on a recognised stock exchange (UK or foreign), units in authorised unit trusts (and similar foreign collective investments) and shares in OEICs. Not only are donated shares free of Capital Gains Tax (CGT), their market value can also be offset against your income tax liability.

Income tax relief

You can claim tax relief for the full market value of your donated shares on the date of disposal, and tax on any associated costs (such as brokers’ fees) can also be claimed back. In other words, you will not pay income tax on the equivalent amount of your annual income in the tax year that the gift is made. Every £1,000 gift of shares to Newcastle University will reduce donors’ effective taxable income for that year by £1,000; resulting in a saving of £400 to a higher rate taxpayer.

For example:

You have a net income of £80,000 and you give shares worth £5,000 to the University. This means you are now only liable to pay income tax on a net income of £75,000; saving you £2,000 in income tax. To qualify for income tax relief in this way, you must:

  • Give the shares to a registered charity
  • Claim the tax relief on your tax return
  • Have paid the amount of tax deducted by the end of the tax year in which the gift is given
  • Have shares that are listed or dealt on a recognised stock exchange.

Capital gains tax relief

In addition to income tax relief, there is also full relief from capital gains tax for charitable donations.
This means that in the hands of Newcastle University, your gift is worth more than if you had sold the shares yourself. The extent of the difference depends on how much capital gains tax you would have paid, which is dependent on your overall taxable income.

* Please note that no capital gains tax is payable on any increase in value, but a loss cannot be used to offset a CGT liability. Visit the HMRC website or contact your financial advisor for information on current CGT rates.

Transferring shares to Newcastle University in 8 easy steps

  1. Donor contacts the Development and Alumni Relations Office (DARO) at Newcastle University
  2. DARO alert the Finance Department
  3. Newcastle University arranges to receive the donor’s share certificate(s)
  4. The University requests a Stock Transfer Form from the Registrar of Shares (or other agent) identified on the certificate
  5. Stock Transfer Form received and completed by Newcastle University and signed by the donor
  6. Completed Stock Transfer Form returned to the Registrar of Shares with the original share certificate
  7. Newcastle University receives a new share certificate in their name
  8. Donor keeps a record of the value of the shares on the day of the transfer*

* It is the donor’s responsibility to keep a record of the value of the shares for their tax records, and not that of the University. It may be useful to keep a copy of the share listings from the day the shares were transferred to the University (such as those contained within the Financial Times).

Sales of shares to the University can also have tax benefits for the donor. Please consult your financial advisor for more information about this donation route.

Representatives of Newcastle University are not able to speculate on the value of shares. If you require assistance, please contact your financial advisor.