Much has been made of Tony Blair’s ability to reduce his tax bill by giving the profits from his memoirs to charity. But there is nothing to stop the rest of us doing the same.
If you want to make a one-off donation, “Gift Aid is the best choice”, says This is Money. It “allows a charity to reclaim basic-rate tax on donations from UK taxpayers from HMRC” and allows higher-rate taxpayers to “claim 18% tax relief on the gross amount of the donation”.
So if you, a higher-rate taxpayer, donate £1,000 to charity via Gift Aid, that gift is worth £1,128 gross to the charity and you can reclaim £230 in tax relief (18% of £1,128).
You can also claim tax relief by donating registered assets, such as shares and property. For example, all donations of land or property are eligible for “full income-tax relief”. So if you are a higher-rate taxpayer and give a flat worth £100,000 to charity, you can “knock £40,000 off your income-tax bill”. Gifts to British charities are also free of inheritance tax.
They escape capital-gains tax too, “even if the asset is worth more than when you acquired it”.