Clear information helps donors give with confidence. When individuals know they can claim tax relief on their donations — or that their gift can be increased through Gift Aid — they’re more likely to give, and to give more.

As a trustee, it helps to understand the main tax incentives available to UK donors. This allows you to answer questions accurately, support your fundraising team and ensure your charity applies the correct rules.

Today we’re covering the key reliefs individuals can claim when supporting your charity, with practical details to guide both trustees and donors.

1. Gift Aid: A Practical Tool to Increase Every Donation

For trustees looking to maximise the value of donations, Gift Aid remains one of the most effective tools available. It allows charities to claim an extra 25p from HMRC for every £1 donated by a UK taxpayer, without asking the donor to give more.

What makes Gift Aid so useful is its simplicity. Once a valid declaration is in place, eligible donations can generate extra income year after year. For trustees managing tight budgets, this can offer breathing room for programme costs, operational resilience or longer-term plans.

Key points to keep in mind:

• Donors must pay enough Income Tax or Capital Gains Tax to cover the Gift Aid being claimed.
• Your charity must retain clear records of declarations and ensure they are up to date — this is essential for compliance.
• Gift Aid can apply to one-off gifts, regular donations, and even some sponsorship or membership payments, depending on how they’re structured.
• Higher-rate taxpayers can claim additional relief on their self-assessment return, an incentive that’s worth highlighting when speaking with individual donors.

Gift Aid Small Donations Scheme (GASDS): Trustees should also know about GASDS, which allows charities to claim Gift Aid on small cash or contactless card donations (£30 or less), without needing declarations, up to an annual limit of £8,000 in donations.

You don’t need to become a tax expert, but knowing how Gift Aid works and how to explain it to supporters, helps unlock funding that’s already within reach. When used well, it strengthens your charity without increasing the ask.

2. Payroll Giving: Encouraging Regular, Tax-Free Donations

Payroll Giving is a simple way for donors to support your charity directly from their salary before tax is applied. The scheme allows employees to make regular donations through their employer’s payroll system, reducing their taxable income at source.

For charities, this offers a steady, predictable stream of income. For donors, it makes giving easier to manage and potentially more generous. A £10 donation, for example, costs a basic-rate taxpayer only £8, while a higher-rate taxpayer pays even less.

What trustees should know:

• Donations made through Payroll Giving do not qualify for Gift Aid but the tax relief is applied immediately through PAYE.
• Only employers with a Payroll Giving scheme in place can offer this benefit. Charities don’t administer the scheme directly but they can promote it through donor communications or workplace campaigns.
• Many larger employers match contributions, doubling the impact.

If your charity has regular supporters who are employed, especially by medium or large organisations, Payroll Giving is worth highlighting. It shows donors how to maximise their support without increasing the cost to them and it strengthens your charity’s monthly income without additional admin.

Encouraging employers to register for the scheme also opens the door to corporate partnerships with long-term value.

3. Gifts of Land, Property and Shares: Tax Reliefs for Non-Cash Donations

Some donors choose to support charities not with cash, but by gifting land, property or listed shares. These gifts are eligible for valuable tax relief and can be a strategic option for individuals managing large assets.

When a donor gives a qualifying asset to a registered charity, they receive two forms of tax relief:

• No Capital Gains Tax is due on any increase in value.
• Full Income Tax relief is available on the current market value of the asset, which can be offset against total income for the year.

What trustees should know:

• This type of gift must be outright and unconditional to qualify. If there are conditions attached, such as rights of use or income, tax relief may not apply.
• The charity can choose to keep the asset or sell it, depending on whether it aligns with long-term strategy.
• Valuations must be accurate and well-documented. A formal receipt and clear donor communication help ensure compliance.
• The IHT threshold (£325,000 nil-rate band) is currently frozen until 2026–30.

These gifts can significantly benefit both the donor and the charity, especially in legacy planning or major fundraising campaigns. For trustees, it’s important to assess suitability based on risk, liquidity and potential upkeep – particularly with buildings or land.

Clarity in gift acceptance policies helps guide these decisions and gives potential donors the confidence to act.

4. Inheritance Tax Relief on Charitable Legacies: A Key Part of Legacy Giving

Charitable legacies remain one of the most important sources of income for many UK charities. They also offer donors a meaningful way to reduce the Inheritance Tax (IHT) liability on their estate.

Under current rules, any gift left to a UK-registered charity in a donor’s will is exempt from IHT. In addition, if at least 10% of the net estate is left to charity, the overall IHT rate on the rest of the estate can be reduced from 40% to 36%.

What trustees should consider:

• Legacy income is unrestricted unless the will specifies a purpose, giving trustees flexibility to use it strategically.
• Timely and accurate probate reporting is essential — the charity may need to liaise with executors to confirm valuations and timelines.
• Trustees should ensure the charity’s name and charity number are clearly listed in legacy communications to avoid delays.

It’s also helpful to maintain open communication with potential legacy donors and solicitors. Providing clear, publicly available information on how the charity uses legacy gifts can build trust and increase future giving.

For many charities, legacy income is foundational. Trustees who support well-structured legacy strategies often find that donors appreciate both the tax efficiency and the long-term impact their gift can achieve.

How to Help Donors Make the Most of Tax Relief

Donors often give for personal or emotional reasons, not for financial return. But when trustees help them understand the tax benefits attached to their generosity, the result is often a deeper relationship and stronger support for the charity. Clear information, timely prompts and consistent follow-ups can make a measurable difference.

Provide Receipts and Keep Accurate Records

Every eligible donation needs to be properly recorded. Receipts should include your charity’s name, registration number and confirmation of the donation. Where Gift Aid applies, include a note confirming the declaration and eligibility. Good records support both your charity’s claim and the donor’s own tax return.

Include Tax Guidance in Donor Communications

It helps to share the basics in newsletters, annual appeals or thank-you messages. A simple reminder, such as “Did you know your donation could be worth 25% more through Gift Aid?” may prompt action from those who didn’t opt in. You can also highlight legacy giving or Payroll Giving in donor welcome-packs or subscription emails.

Signpost to HMRC or Professional Advice

Charities are not expected to offer tax advice but they can help donors find it. Linking to the relevant HMRC pages or encouraging donors to speak to their accountant creates a supportive experience without stepping outside your remit. For major gifts involving assets, suggest discussing options with a solicitor or tax adviser.

Create Resources with Your Accountant

Trustees working with a specialist charity accountant can develop simple FAQs or printable guides. These can be shared at events or included in fundraising packs. When information is correct and accessible, it helps both donors and the team supporting them.

Turning Knowledge into Donor Trust

Tax relief play a quiet but powerful role in the giving process. When trustees understand how they work, they can help donors feel confident, informed and valued. Whether through Gift Aid, Payroll Giving, asset donations or legacy gifts, every tax incentive is a chance to strengthen trust and reinforce your charity’s mission.

Providing clarity at the right time helps supporters make the most of what they give and helps your charity receive the full value of that support.

At Charity Accounting Partners, we work with trustees to clarify the rules and build donor confidence through accurate, timely advice.

Book a free call with our charity accountants in the UK to see how we can support your team and your donors.