How do donors benefit?
Gift Aid is the UK government program to encourage gifts to UK registered charities. Gifts made to Cambridge in America qualify for Gift Aid when made through Cambridge in America (UK) Ltd. CAm UK’s sole shareholder is Cambridge in America, and it is recognized by the IRS as a 501(c)(3) organization and by the UK Charities Commission as a registered charity in England and Wales. This structure enables those who are liable for both UK and US tax to obtain tax relief in both countries on the same contribution.
Giving to CAm UK maximizes the impact of your gift and the charitable deductions available to you on both sides of the Atlantic.
Gifts left by Will to CAm UK will qualify both for relief from inheritance tax in the UK, and for an estate tax deduction in the US.
How does Cambridge in America benefit?
Making a cash donation using the Gift Aid scheme increases the amount of the gift by enabling CAm UK to reclaim the basic rate tax on the gift. Currently, for every £1 donated, CAm UK can claim an additional 25 pence from HM Revenue & Customs. This means that an £1,000 gift results in £1,250 of support that Cambridge in America can provide for the University of Cambridge and its member Colleges.
When can the Gift Aid scheme apply?
The Gift Aid Scheme will apply to a charitable gift of cash made by a UK taxpayer, if the total amount of that taxpayer’s income tax and/or capital gains tax liability in the year that the gift is made is equal to or greater than the amount the charity will claim for the gift. Gifts of cash can be made by either check or wire transfer. The UK tax year runs from April 6 to April 5. For more information, please consult your tax adviser or visit the HMRC website.
Can capital gains qualify a donor for Gift Aid?
Yes, capital gains can qualify a donor for Gift Aid, even if it’s the only tax that they have paid. By way of example, if a donor sells a piece of real estate and incurs capital gains, they can use that to take advantage of Gift Aid.
How do I apply the Gift Aid scheme to my gift?
Complete a Gift Aid Declaration Form and include it with your gift payable to Cambridge in America (UK) Ltd. CAm UK will then apply to HMRC to reclaim a portion of the tax you have already paid and will advise you of the amount collected. There is no limit to how often Gift Aid relief can be claimed; one gift declaration covers all current and future gifts you make to CAm UK.
What if I pay the higher tax rate?
If you pay the higher rate tax, you can claim the difference between the higher rates of tax (40% or 45%) and the basic rate of tax (20%) on the gross value of your donation to the charity.
For example, if you donate £100, the gross value of your donation to the charity is £125. If you pay tax at the 40% rate, you can claim back 20% of this (£25) for yourself. You can make this claim on your Self-Assessment tax return. For more information on Gift Aid qualifications, please visit the HMRC website, noted above.
Does a gift I make jointly with someone else qualify for Gift Aid?
Yes, but you must tell CAm UK how much is from each of you, and you will each need to sign a separate Gift Aid Declaration Form if the whole amount is to qualify.
What effect does this have on my US tax return?
The amount of the gift will be the cash that you give and may also include the amount of basic rate tax the charity has reclaimed. Each amount will be stated separately. Please note that you should not claim a foreign tax credit for the amount of UK basic rate tax that is subject to the Gift Aid scheme and reclaimed by the charity. Equally, you should not claim a foreign tax credit for the higher rate tax for which you claim a refund.
Which other gifts attract tax relief?
Capital assets- such as securities, stocks and bonds- standing at a long-term gain (held for more than one year) can be given to the charity without being subject to US or UK tax on the gain.
Donors can obtain UK income tax relief in addition to capital gains tax relief on charitable gifts of certain quoted shares or on other non-cash assets. The shares must fall into the definition of ‘qualifying investments’ to attract the additional tax relief, which includes any quoted shares or securities listed on a ‘recognized’ stock exchange or some that are privately held.
As Cambridge in America qualifies as a publicly supported charity, you may be eligible to receive a US income tax deduction for the full fair market value of the shares. For many other types of assets, although there will be no tax to pay on the gain, you will receive a deduction for your basis in the asset.
What types of gifts are accepted by Cambridge in America (UK) Ltd?
CAm UK accepts unrestricted and restricted gifts by check, wire transfer, of stocks/shares and of other non-cash assets. Donors are encouraged to make recommendations as to the allocation of the gift to be approved by the Trustees of CAm UK.
What currency is accepted?
Pounds sterling or US dollars.
What happens after I give?
After you give, Cambridge in America (UK) Ltd. will send you a tax receipt and letter of acknowledgment for your original gift, which you can use for UK tax purposes. CAm UK will collect the appropriate Gift Aid from HM Revenue & Customs. CAm UK remits all monies received to the University of Cambridge and or its member Colleges, or towards related projects in accordance with the Trustees’ allocations. Cambridge in America will send a US receipt letter noting the amount of the gift as well as the amount of any Gift Aid claimed. This letter should be provided to your tax accountant or retained by you with your US tax papers.
Whom do I contact for more information about or to make a gift to Cambridge in America (UK) Ltd.?
Liliya Panko, Chief Financial Officer
Cambridge in America
1120 Avenue of the Americas
7th Floor
New York, NY
Tel. 212.984.0960
giving@cantab.org
Cambridge in America (UK) Ltd. is a registered charity No. 1128757 – Registered as a company in England and Wales No. 6804777