A client historically made significant gift aid donations by way of cash payments. These extended his basic rate band so he received a reduction in income tax due as a result. However, he was holding numerous investments standing at a significant capital gain. I suggested that he might want to consider making a gift of these shares to the charity instead of making fairly significant cash payments.

This reduced his income by reference to the value of the shares donated. In addition, no Capital Gains Tax arose on the gift of shares. Given that he used to sell his shares to make his gifts, the gift of the shares to the charity instead was a tax efficient way of making the desired donation.