Tax Efficient Giving

Care of the elderly

Did you know that donations made to a charity could be eligible for tax relief?

In Budget 2013 the Minister for Finance advised that there was to be a change in the way that charities like St. Vincent’s Foundation could make a reclaim for taxation on donations in certain circumstances. This has now been clarified.

From January 2013 donations of €250 or more in a given tax year would receive a tax rebate for the charity provided the donor/taxpayer had paid tax of this amount or more in the relevant tax period.

Because donations are made from “after-tax” income the tax reclaim is calculated to refund the amount of tax that would have been deducted and the taxation rate used is 31%.

The benefit to charities is best demonstrated by an example as follows: where a donor gives €500 during 2013 to St. Vincent’s Foundation the €500 is considered to be what was left after the donor had paid tax. At a rate of 31% this gross amount before deduction of tax is calculated at €724.65. If the donor has paid a minimum of €224.65 in tax in 2013 the Revenue will repay this amount (€224.65) to St. Vincent’s Foundation thereby increasing the value of the donation by almost 45%.

Relevant donors complete and sign a Revenue CHY4 form which we will provide to donors.

It is very worthwhile as it substantially increases the income to charities at no further cost to donors.