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Tax relief on unwanted Christmas gifts!
What is it?
If you’ve got some unwanted presents you could claim tax relief for them.
To do this you can’t just give the unwanted socks to charity.
This is because the legislation for the Gift Aid scheme says it is “Relief for some gifts of money to charities by individuals”.
So how do you claim relief on the gifts?
How can I claim it?
Some charities operate a system which allows the charity to act as an agent, selling goods on behalf of the owner.
This means that the items remain your property until they are sold, at which point the proceeds, less selling costs, belong to you and not the charity.
After the sale you can agree to donate all of the proceeds to the charity, meaning you may be entitled to tax relief on the donation.
You also have to make a valid gift aid declaration to cover the donations made.
How can I take part?
To start with you need to make sure the charity operates this scheme, so it is worth checking with your local charities.
The charity will likely have some forms and statements to fill out, which will be required for the gift aid declaration.
You should be aware that if you normally sell wooly jumpers, and now use the charity to sell them, then this may count as trading income, and therefore be taxable, even if the proceeds are donated.
Kind regards Ilyas