Key Considerations for Supporting US-Connected Clients with a DAF

For private client advisors, supporting clients with financial ties to both the UK and the US often means navigating an additional layer of complexity. Charitable giving is no exception. While many US-connected clients are keen to support the causes they care about, they also want to ensure their philanthropy is structured efficiently across both jurisdictions.

A donor-advised fund (DAF) can help simplify this process. Through NPT Transatlantic, a UK-registered charity that is also recognised as a US public charity for tax purposes, eligible donors may be able to benefit from both UK and US tax relief on the same charitable contribution, subject to their individual circumstances and appropriate tax advice.

Here are four key considerations when supporting US-connected clients.

 

Consider the assets your client plans to donate

A DAF can accept more than cash contributions. Depending on a client’s circumstances, they may also be able to donate appreciated shares, property, and other complex assets, including interests in private businesses or alternative investments.

For many clients, contributing non-cash assets can be an effective way to support charity while potentially reducing capital gains tax exposure. UK taxpayers may also be eligible for Gift Aid on qualifying cash donations, increasing the value of their charitable contribution.

 

Think strategically about the timing of giving

Rather than making annual donations directly to charities, some clients may benefit from making larger contributions to a DAF and distributing grants over several years. This approach, often referred to as “bundling” charitable donations, can provide greater flexibility around tax planning while allowing clients to maintain a consistent programme of charitable giving.

Assets held within the DAF can also be invested until grants are recommended, giving clients the opportunity to grow the value of their charitable fund and potentially increase their long-term philanthropic impact.

 

Support giving across borders

Many US-connected clients want to support charities in both the UK and the US, while others have interests that extend further afield. NPT Transatlantic enables donors to recommend grants to eligible charities around the world, with all appropriate due diligence and grant administration managed on their behalf.

This allows clients to focus on the causes they want to support, while giving advisors confidence that the necessary compliance requirements are being addressed.

For clients with tax obligations in both the UK and the US, philanthropy doesn’t have to be complicated. By understanding the options available and introducing specialist solutions such as NPT Transatlantic where appropriate, private client advisors can help clients develop a giving strategy that reflects both their charitable ambitions and their cross-border circumstances.

As always, charitable planning should form part of a wider conversation involving legal and tax advisors to ensure the most appropriate approach for each client’s individual situation. For further information about NPT Transatlantic, please contact us.