Tax when your limited company gives to charity
Land, property and shares
Your limited company could pay less Corporation Tax if it gives or sells any of the following to charity:
- land or property
- shares in another company
You can’t claim for gifts or sales of shares in your own company.
Contact your chosen charity first to make sure it can accept your gift.
What you get
If you give these to charity (including selling them for less than they’re worth):
- you won’t have to pay tax on capital gains
- you can deduct the value of the gift (its ‘market value’) from your business profits before you pay tax
If you donate or sell to a community amateur sports club (CASC), you don’t pay tax on capital gains but you can’t deduct the value of the gift from your business profits.
Work out the market value
You’ll need to know how much the gift would sell for in an open market (its ‘market value’) to calculate your tax relief. You can get professional help with this.
What you need to do
You must keep documents relating to the donation to show that you’ve made the gift or sale and that the charity has accepted it. You must keep these records for at least 6 years.
Land or property
You must get a letter or certificate from the charity which contains:
- a description of the land or property
- the date of the gift or sale (the ‘disposal date’)
- a statement confirming that it now owns the land or property
Shares
You must fill in a stock transfer form to take the shares out of your company’s name and put them into the charity’s name.
Selling land, property or shares on behalf of a charity
When you offer a gift of land, property or shares, the charity may ask you to sell the gift on its behalf.
You can do this and still claim tax relief for the donation, but you must keep records of the gift and the charity’s request. Without them, you might have to pay Corporation Tax.