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Giving to overseas charities is becoming easier, and tax-efficient options are becoming increasingly accessible, although donors in the UK who want to give tax efficiently to a charity based in another country may find some options limited.
Private charitable foundations remain a well used mechanism for tax-efficient international giving. As registered charities, they are eligible for Gift Aid, and can be used to support charitable projects around the globe. Gift Aid can only be claimed on donations to UK registered charities, although you can donate to a charity based in the UK which operates internationally, or though a charitable intermediary.
For example, donors who live in a country represented by the Transnational Giving Europe (TGE) partnership can give to non-profit organisations in other member countries. A donor makes the gift to her home country’s TGE partner foundation, which gives her a tax receipt and transfers the gift to the foreign beneficiary organisation. The donations receive all applicable tax benefits in the donor’s home country. There is a 5% administrative fee. TGE currently operates in the UK, Belgium, France, Germany, Ireland, the Netherlands, Poland and Switzerland, with plans to soon expand to six additional countries.
TGE’s UK partner, the Charities Aid Foundation (CAF), has a number of its own products to enable tax-efficient international giving, including the CAF Charity Account and CAF Trust. For those who pay tax in the US and the UK, the CAF American Donor Fund enables you to obtain tax benefits in either country while supporting charities anywhere in the world.
Giving in Europe is an online resource offering information and advice on making tax-efficient cross-border gifts across Europe. The website includes a tool that enables prospective donors to gain a quick glimpse of how a donation could be affected by tax according to the respective locations of the donor, the assets to be gifted, and the beneficiary organisation in any of the 26 European countries listed on the site.
In addition to these resources, you should also consider consulting a tax advisor or solicitor for advice bespoke to your own situation, especially when making a major gift.
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