Gift of Land and Property to Charity- Unwanted Drum

Jabo (#1 son) enjoys his toys. From a fire engine to a space rocket he loves playing with the brightly coloured figures, vehicles and buildings. The problem is that they are bloody noisy!

Charity HQ

“SPACESHIP 1 THIS IS GROUND CONTROL PREPARE FOR LIFT OFF 5-4-3-……”

*Click*

“THIS IS AN EMERGENCY NE NA NE NA NE N…”

*Click*

Thankfully they also have an off switch!

Most of these toys are bought by the doting grandparents who seem to take a macabre pleasure in supplying these devices of torture. I wouldn’t mind but in my day (did I just say that) toys didn’t come with 100 megawatt speakers built into them. When my parents were questioned they did point out that I had a keen interest in a drum during my younger years.

That maybe true but surely a music education doesn’t warrant the noise pollution that emanates from the family room does it? I can only assume they have been plotting this moment for years. At present unveilings I’m not sure if they are waiting to see the excitement on their grandchildren’s face or revelling in the look of horror on mine.

I will therefore seek solace in my equally cunning plan when Jabo has children. A Karaoke machine or a set of symbols is top of the list at the moment!

The only respite that I have is that he also likes the more docile toys such as Duplo buildings and his car garage. I fear that these toys will not hold his interest for long and maybe discarded. Luckily they will be passed on to younger brother Baby Jarvis who will make good use of them.

But what happens if you have a property (or drum, see what I did there!) that no one wants to rent from you at the moment. Well tax relief may be available if you let others use it for the short term.

THE TAX BIT

Individuals and companies can claim tax relief on gift of land and property to charities. Unfortunatley relief is not available for gifts to Community Amateur Sports Clubs. The relief is a straight deduction against income in the year that the gift is made.

The relief is based on the value of the net benefit to the charity so the market value of the property will form the basis of the deduction.

It is not necessary to give away the freehold of the property but instead a lease maybe granted. A lease absolute will be required and the deduction will be based on the market value of that lease.

How to Evidence the Donation

A gift can be made to any charity but you will need to contact them first to ensure they have the powers to accept the property. Once approval has been received you can make the gift.

The charity should then give you a certificate on headed paper. There is no prescribed format for the certificate but it must include the following: a description of the qualifying interest in land which is the subject of the disposal

  • the date of the disposal
  • a statement that the charity has acquired the qualifying interest in land

A claim is then made on the relevant tax return for either the company or individual.

If you have a property you cannot let it maybe worth obtaining tax relief by granting a lease to a charity. Alternitivley if you are a charity it maybe worth approaching the owner of an unused building.

There are various anti-avoidance provisions so make sure a qualified chartered tax advisor reviews the transaction first.

If there is a drum in santa’s sack this year I will also be making a donation to charity!

By Peter Cross

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