All You Need to Know About Donating Non-Cash Assets to a DAF
While many charities are unable to facilitate non-cash gifts, a donor-advised fund offers the flexibility to gift a variety of assets, often helping donors maximise their charitable impact in a way that is most suitable to them.
As an advisor, here’s what you need to know about donating non-cash assets to a DAF.
Gifts of shares: One of the most tax efficient ways to make charitable donations and includes donating shares, bonds and OEICs. Your clients can make gifts of shares listed on any stock exchange recognised by HMRC. For UK taxpayers, gifted shares come with income tax relief at the highest rate and are also free of capital gains tax.
Illiquid Assets: From tangible property to business interests and art, such gifts would be liquidated once the contribution has been made. For these types of contributions, the DAF provider, such as NPT UK, would need to conduct legal due diligence on the asset to ensure compliance with HMRC and Charity Commission.
Alternative investments: Your clients with alternative investments may gift assets such as private equity or hedge fund interests to their DAFs. While the process is widely used in the US, it is also growing in popularity among finance professionals in the UK.
Legacy gifts: For clients where legacy is a key driver behind their philanthropy, a DAF can be named a beneficiary of a bequest under a will or trust or designated as beneficiary of a life insurance policy or pension plan.
Grant transfers: Your clients may transfer funds from an existing charitable trust, UK charity, other charitable entity or from another DAF.
Offshore Contributions: NPT UK can accept contributions to a DAF offshore. Your clients can use offshore trusts and other fiduciary structures to make contributions to a DAF.
With DAFs accepting such a variety of assets beyond cash – whether publicly traded securities, restricted or control securities, privately-held stock, alternative investments or art – your clients can be confident in maximising their philanthropic impact, via whichever means is most suitable to them.
NPT UK can help you find what works best for your clients. To find out more contact us.
NPT UK does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.