Chief Operating Officer of Berkshire Community Foundation (BCF), Jon Yates described how BCF works with professional advisers, notably accountants, solicitors and financial advisers to help corporate fund-raising initiatives. The motto,” think local and give local” reflects BCF’s remit to provide advice, distribute grants and raise the profile of local charities and community groups addressing identified need across Berkshire, as well as to inspire philanthropy and charitable giving.
Jon explained the key role professional advisers have in philanthropy and that the tax breaks available to philanthropists really benefit the charities BCF supports. Indeed, BCF’s Business Philanthropy Club provides the structure for clients of professional advisers who wish to give. He added that there was a lot of money in dormant or inactive trusts that could be used to support needy groups.
“Seminars such as this are always so valuable because even when you have been working in this area for years and think you might just know it all you inevitably find out something new and interesting. I was delighted to be in a room full of interesting and knowledgeable people who have a care for what matters in our society and want to use their professional skills and expertise to alleviate need and disadvantage. We can help solicitors, accountants and wealth managers deepen their relationships with their clients by sharing what we know and offering a route to targeted and effective philanthropy. Together that is a very powerful thing and I want to see more of it at work for the good of the people of Berkshire.” Jon Yates
Tax-subsidised charitable giving
Phil Kinzett- Evans, Newbury-based tax partner of accountants Ross Brooke, outlined the benefits to donors of tax-subsidised giving, explained gift aid and gave examples of basic, higher and upper rate tax payers. Phil also talked through how tax liabilities could be mitigated whilst making charitable donations, as well as explaining the rules on carry back and how corporation tax can be mitigated on corporate charitable donations. Pay roll giving or give as you earn (GAYE) is another area that benefits both the donor in terms of tax mitigation as well as the charity, concluded Mr. Kinzett- Evans.
The Financial Adviser’s view
Andy Coles, Senior Financial Adviser at Beaufort Financial, is a firm believer in educating clients about the benefits of charitable giving during their lifetime, rather than after death. But before contemplating supporting a charity close to one’s heart, clients must consider the need to plan for emergency expenses, school fees and care home costs in the future, as well as day to day and one-off spending in retirement. Andy said that clients need to know what they can really afford to gift. Having gone through all income and expenditure Andy can put together a life plan that maintains a necessary level of income for a long retirement as well as to have the cash flow to support a charity gifting plan. Many clients appreciate seeing the benefit of their donations and the impact they have during their lifetimes; but it is important to know how and when to make a gift for the benefit of both philanthropist and beneficiary.
Mitigating Inheritance Tax AND boosting charitable donations
Concluding proceedings, Penny Wright, Partner in the Inheritance Protection Team at law firm, Gardner Leader and a specialist in philanthropy and charity law, explained how leaving 10% to charity reduces higher rate inheritance tax (IHT) from 40% to 36%. It is important to structure a gift to charity to mitigate IHT and boost donations and Penny gave an example of how £100,000 can be saved on a £2.5 million estate. Penny also explained the pros and cons of setting up a new charity for a special cause or finding an existing one which will fulfil the terms of a bequest.