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Share giving

'I would like to make a gift to Bristol and to take advantage of tax benefits. I’ve heard that giving shares can be advantageous (particularly in years when I wish to reduce my tax bill, and/or have a share windfall). What are the facts?' - Bristol alumnus, aged 66

What tax relief is available?

Income Tax Relief

The donor will receive income tax relief at her / his highest marginal rate, as per the table below:

Value of Shares given Amount of income tax relief you can claim Cost to you (as share-donor) Value to the University of Bristol
Basic rate tax payer (20%)

£1,000

£200

£800

£1,000

Higher rate tax payer (40%)

£1,000

£400

£600

£1,000

Additional rate tax payer (50%)

£1,000

£500

£500

£1,000

Capital Gains Relief

Your gift will be entirely exempt from Capital Gains Tax (CGT). Additionally, if you have not paid enough Income Tax to benefit from all the relief on your gift, but you do have a CGT liability, then your gift will reduce your CGT liability.

Corporation Tax Relief

If the gift is made by a company then the company can claim corporation tax relief up to the value of the shares.

Summary

The total value of your gift will reduce the sum of your Income Tax and Capital Gains Tax liability at your highest marginal rate. There is no further tax relief for the University of Bristol, though the University will not have to pay any CGT either.

Examples

You had net income of £70,000 in the 2012/13 tax year. You give shares worth £20,000 to the University of Bristol. Now, you will only be liable for income tax on a net income of £50,000 at 40% income tax – saving you £8,000 in Income Tax.

Or, if you had net income of £250,000 in the 2012/13 tax year. You give shares worth £20,000 to the University of Bristol. Now, you will only be liable for income tax on a net income of £230,000 at 50% income tax - saving you £10,000 in Income Tax.


Which shares can be treated in this way?

Any shares or securities listed on the London Stock Exchange and any stock exchange outside the UK approved by the Inland Revenue for tax purposes. An up to date list of such stock exchanges is available from the Campaigns and Alumni Relations office, but broadly it covers most European and US exchanges including NASDAQ as well as a number of Asian and South and Central American Exchanges. Note that the tax relief is only available against UK taxable income or capital gain.


Calculating the value of your Gift

Establish the value of the shares

For shares on the London Stock Exchange Daily Official List, the share price will be either:

For other shares or securities:

Add any dealing / transfer costs

Please do not sell your shares yourself! Shares must be transferred directly to a charity for you to claim the tax benefits. Your broker or company registrar may charge you for the transfer: if they do, the cost of the transfer can be added to the notional value of the shares sold.

Inland Revenue Help sheet “Giving land, buildings, shares and securities to charity” explains how to work out the market value of the shares, and how to claim your tax relief. See below for details on how to get a copy.


Making a gift: transferring the shares to the University

Your shares may be held in your own name, or they may be held in the name of a nominee company. You may or may not have certificates for them. (If you are not sure, ask your stockbroker or bank about how your shares are held).

If you hold a share certificate: Contact the company’s registrar. Their details can be found on your share certificate, dividend vouchers, the company’s annual report, or their website. The company’s registrar will provide a stock transfer form for you to complete and return to them (keep a copy of this form, which is your evidence to the Inland Revenue concerning the date of the gift).

Nominate the University of Bristol as the new shareholder, with contact details: University of Bristol, Campaigns and Alumni Relations, Senate House, Tyndall Avenue, Bristol, BS8 1TH. The company registrar will then issue a new certificate to the University of Bristol.

If your shares are held in a nominee account: Ask your broker to transfer the shares for you. The broker may charge you for this service, but you should be able to get tax relief on this as well as the value of the shares.

Please ask your stockbroker or bank to transfer them using the following details: University of Bristol, Campaigns and Alumni Relations, Senate House, Tyndall Avenue, Bristol, BS8 1TH

Please also contact us to let us know to expect your gift, and how you would like it to be used.

Laura Serratrice, Head of Fundraising,
University of Bristol,
Campaigns and Alumni Relations,
Senate House,
Tyndall Avenue,
Bristol
BS8 1TH.

Telephone +44 (0)117 331 7560 or email laura.serratrice@bristol.ac.uk


Inland Revenue Leaflets

Further details on how the tax relief works are given in the Inland Revenue’s Help sheet “Giving land, buildings, shares and securities to charity”.

Donating shares can be a very tax-effective way of giving, especially if you are a higher rate, or additional rate tax-payer, as you can claim full tax relief to the market value of your shares.

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