Tax Relief and Gifts of Foreign Currency to Charities
A number of charities are collecting foreign currency - particularly EU currency due to be replaced by the Euro. In the Pre Budget Report, the Chancellor of the Exchequer confirmed that donations of foreign currency are eligible for tax relief under Gift Aid.
To help the charities and donors to make the most of these donations, IR Charities has put together a list of the most common questions about Gift Aid tax relief.
IR Charities can give advice tailored to the circumstances of your appeal.
For Charities
Q How can we bring these donations within Gift Aid?
A Foreign currency is no different from other gifts of money. It is eligible for Gift Aid.
Q What systems do we have to follow?
A You will need to use similar systems as for your existing appeals but adapted to the circumstances where you may be collecting more than one foreign currency. If you are using a collecting envelope you can print a simple declaration on it. If your appeal isn't using an envelope you will need to obtain declarations from donors. You will need to retain records of the amounts collected under Gift Aid.
Q What about claim forms?
A You can keep the envelopes or other donation records in serially numbered batches and claim by the numbered batch on the R68.
Q Is help available?
A IR Charities is very happy to provide guidance on specific points on meeting the Gift Aid rules. Our Audit Unit will be happy to give advice on your systems and whether they provide the necessary audit trail. You can call IR Charities on 0151 472 6043/6046 (or 0131 777 4040 for Scottish charities). You can call our Audit Unit on 0151 472 6126.
Q Will banks accept coins and small denomination notes?
A You may need to make special arrangements with your bank.
For Donors
Q I have some EU currency that is due to be replaced by the Euro. Can I give it to charity?
A Yes, many charities are collecting this currency. Donations in foreign currency qualify for Gift Aid just as much as sterling donations. Q Do I have to fill in any complicated tax forms?
A No. You do need to complete a simple declaration giving your name and address, confirming that you are a taxpayer and that you want your gift to be made within Gift Aid. The charity will provide you with the form.
Q Is there any minimum or maximum amount that I can give?
A There is no minimum amount, however the charity may choose not to claim the tax relief on very small amounts. There is no maximum.
Q Can I get tax relief for my gift to charity?
A Yes, you can use the Gift Aid scheme to add 28 pence in the pound to the value of your gift. The charity claims back the 28 pence in tax. If you pay tax at the higher rate you can claim relief against your higher rate tax liability.
Q How do I claim the higher rate relief?
A Simply enter the £ sterling value of your gift on your SA tax return. You can find conversion rates in the daily newspapers. You should use the conversion rate for the date you make the gift.
Q What if I'm not a taxpayer?
A If you are not a taxpayer your gift cannot be made under Gift Aid, but the charity will still be grateful for it.
