Gifts of land and buildings to charities

There are specific tax rules for taxpayers who donate land or buildings to a charity. Where the relevant conditions are met, both Income Tax and Capital Gains Tax (CGT) relief may be available. Relief can also apply where a property is sold to a charity for less than its market value, or where a lease is granted at no rent, or below market rent.

When a qualifying asset is gifted, its market value can be deducted from the taxpayer’s total taxable income for the tax year (6 April to 5 April) in which the disposal takes place.

In addition, gifts of land, property, or shares to charity are generally exempt from CGT. However, where an asset is sold for more than its original cost but less than its market value, a partial gain may arise. In these cases, the gain is calculated using the actual sale proceeds rather than the market value.

In some situations, a charity may ask the donor to sell the asset on its behalf. Tax relief can still be claimed, but it is essential to retain clear evidence of both the gift and the charity’s request. Without this, a CGT charge may arise.

If you need tax advice, give our expert and friendly team a call on 01380 723692 or email us here.