How Much Can I Give Without Being Taxed?

There are tax benefits for giving to charitable causes, but how much can you give away to family before inheritance tax becomes a consideration.

Sensible Giving: Proper Advice Pays Off

Many people decide to give money to charities or relatives at some stage, but there are right ways and wrong ways to give money when it comes to the tax implications. If you want to provide a one-off or regular gift, proper advice always pays off.

How Much Can I Give Without Being Taxed?

You may think that you can simply give a relative a gift of money whenever you want to, but it is not that easy. Gifts can be taxed because the government does not want people to use gifts as a way to avoid inheritance tax. It is therefore essential to get professional advice.

You can give as much as you want to 'exempt beneficiaries', such as your spouse or civil partner, registered charities and some organisations like museums. You can also give away small gifts of up to £250 to as many people as you want in a tax year.

The total annual amount that you can give away without tax implications is £3,000, and this can be carried forward for one year only (so if you don't make any gifts one year, the next year you can give away £6,000).

There are also different rules for wedding presents and for regular gifts, and there is the issue of the Inheritance Tax Reduced Rate to consider. This is where a reduced rate of the tax is applied when you donate 10 per cent or more of your estate to charity.

It is therefore essential to discuss all of the implications when you want to give money to a person or organisation, especially if you are elderly or in ill health. If you are trying to find out where to get advice on gift tax implications, we will be more than happy to help.

Gift Aid

Gift Aid is the main way to give to charities tax efficiently. It allows charities to reclaim the basic rate of income tax, which is 25 percent of the amount donated. It is even better for higher-rate taxpayers because they can claim the difference between the higher rate and the basic rate, which is currently 20%, against their own liabilities, so the net cost of the donation is reduced.

For example, if you make a donation of £1,000 to charity, the charity receives £1,250. The tax reduction is also £250 for higher rate taxpayers, so it only costs you £750.

Again, it makes sense to get proper gift tax advice before you start giving regularly to charity or before you make a large gift.

Payroll Giving

This is a special scheme that makes it easy for you to make gross donations to a charity. It comes straight out of your salary before any tax has been calculated, and there are no statutory limits. It can be a good way to give to charity, and we will we happy to discuss this with you.

Other Issues Where Professional Advice Is Useful

There are many other issues to consider, including Shares and Securities, property gifts and more, and you can find some advice on these areas on our website. So it simply makes sense to discuss your plans with a professional. After all, you can only give efficiently when you know how best to do so.

What About Corporate Giving?

Corporate giving can actually help to improve your bottom line. For example, it can improve employee motivation, boost client loyalty and it can also be great for your reputation.

However, you need a good strategy to make it effective. This involves considering the tax implications as well as choosing a cause that resonates well with your customers and employees.

Again, we are here to discuss your plans so that you know you are always giving to charity in the most efficient way possible.