The Tax Benefits of Donating to Charity in the UK

Giving is mainly about supporting the causes you care about. But the UK tax system can also make donations more efficient — for you and for the charity — if you know how the rules work.

This guide covers the essentials: Gift Aid, higher-rate relief, what qualifies, and how charitable gifts in a will affect Inheritance Tax.

1. Can you get tax relief on donations in the UK?

Yes, mostly through Gift Aid.

Gift Aid allows charities to reclaim basic-rate tax on eligible donations. It doesn’t reduce the amount you give; it increases what the charity receives.

How it works:

• You must be a UK taxpayer
• You must have paid enough income or capital gains tax to cover the Gift Aid claimed
• The charity reclaims 25p for every £1 you donate

If you pay higher-rate tax:

• You can personally claim extra tax relief through Self Assessment
• This reduces your tax bill, rather than increasing the charity’s payment

Example: You donate £100. The charity receives £125. If you’re a higher-rate taxpayer, you can claim up to £25 back via HMRC.

2. What donations qualify for tax relief?

Usually eligible:

• Cash donations (direct debit, bank transfer, card payments)
• Payroll Giving through your employer
• Donations of shares, land, or property to a registered UK charity
• Sponsored events where you receive no significant benefit

Not eligible:

• Raffle or lottery tickets
• Auction bids where you receive something in return
• Donations to individuals
• Donations to overseas charities that are not UK-registered

3. Making the most of Gift Aid (without overcomplicating it)

A few practical points:

• Always confirm Gift Aid if you’re eligible — charities can’t claim it otherwise
• Higher-rate taxpayers need to actively claim extra relief; it isn’t automatic
• Keep records: bank statements, or use an app like Legacy to track your giving
• If your income changes year to year, double-check you’ve paid enough tax to cover Gift Aid

4. Giving through a will and Inheritance Tax

Charitable gifts in a will can reduce Inheritance Tax (IHT):

• Gifts to UK charities are exempt from IHT
• Leaving at least 10% of your estate to charity reduces the IHT rate on the remainder from 40% to 36%

This can be a thoughtful and tax-efficient way to support causes long-term, usually alongside professional advice.

5. How Legacy helps make this easier

Keeping track of Gift Aid and tax relief is often where people slip up — not because it’s hard, but because it’s easy to forget.

Legacy is designed to reduce that friction by:

• Clearly showing which charities are Gift Aid eligible before you donate
• Tracking your total donations across the tax year in one place
• Providing a simple annual total you can use when completing Self Assessment

No spreadsheets, no digging through bank statements — just a clear record of what you’ve given in a tax year.

The bottom line

A bit of clarity around tax rules helps your donations go further for charities, and takes friction out of tax time for you. Tools like Legacy don’t change why you give — they change how much of your time and money the process costs.