Charity BEGINS AT HOME
deserving local charities, may also allow the charity to reclaim between £20 and £125,000 from the Tax Office?
D
By MALCOLM CHAMBERS, Chambers Accounting Limited
This very generous tax relief, introduced in 1992, is only intended for outright gifts, and must have no strings attached nor give any benefit to the donor, or anyone connected with the donor, other than the feel good factor, of course.
How does the scheme work? You make a payment to the charity and give them a certificate so that they can claim the tax from the Comptroller of Income Tax.
For example: You give £1,000 to a local charity this is treated as an after tax payment, being a gross payment of £1,250 taxed at 20% the charity, being exempt from income tax, can claim the tax deducted of £250 so, in fact, your donation of £1,000 is really worth £1,250 to the charity.
The minimum donation of £100 has a value to the charity of £125, and, for the very wealthy, the maximum qualifying donation under the scheme of £500,000 carries a charitable value of £625,000. How generous is that!
You should be aware that the tax the charity reclaims on your gift must be less than the tax you paid on your income for that year, otherwise the Comptroller will ask you to pay him the difference. You may want to check this when you get
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id you know that making a single donation of between £100 and £500,000, to one of our many
your tax assessment, since you will then have until 31st December of that year to make use of the scheme.
I do not pay tax. What's my position? If you do not pay tax there is no advantage to the charity so you should not use this tax reclaim scheme, as the Comptroller will ask you to make up the difference.
What kind of certificate do I give the charity? The certificate form is called R10 (LSD), and it asks you to give details of the payment and certify; that your payment meets all the conditions for relief set out on the certificate and that you have paid or will pay at least as much income tax as the charity will claim back on the gift.
Remember, the charity cannot claim repayment until you supply the certificate.
Where can I get a blank R10 certificate? You can download it from the Taxes and Your Money/Income Tax/Charities page at
www.gov.je where there is also more information on the scheme than can be explained in this short article. Ask the charity to give you one (most will be aware of the scheme), collect one from the Taxes Office help desk or telephone them for a certificate to be sent to you in the post.
If I make several small gifts to a charity, can I supply a certificate when the total reaches £100? No. Each separate payment must be at least £100 to qualify for tax relief.
Does a joint gift qualify?
The minimum £100 is per individual. So provided your share is at least £100 it will qualify. Each person who has made a gift of at least £100 has to supply their own certificate for his or her share of the total. The same rule applies if a husband and wife or civil partners want to make a joint gift.
Can I get anything in return for my gift? No. If there is any arrangement whereby you, or any person connected with you, benefit from the gift, the payment will not qualify for tax relief.
A 'person connected with you' includes, for example, your wife, husband, civil partner, parents, children, grandchildren, brothers, sisters and their spouses; your business partners and their families; companies controlled by you or by persons connected with you.
If I give a work of art or other valuable item, does that qualify? No. Gifts must be in the form of money. The solution may be to sell the item and donate the proceeds under this scheme.
Can I make more than one gift in a year? Yes. You can make as many donations as you like. But to qualify, each payment must be at least £100 and the total in any one year must not exceed £500,000, and a certificate must be given for each donation.
Can I give to any local charity? Yes, as long as the charity is established in Jersey, and has been granted tax exemption by the Comptroller of Taxes. The scheme does not apply to an overseas charity.
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