How to Donate Shares & Other Assets

Why donating shares can be so tax efficient

Giving shares directly to the Foundation can be a tax-efficient way of making a donation.

When you give qualifying shares or other investments directly to a charity, you will generally not have to pay Capital Gains Tax on any gain arising from the gift. This can be particularly beneficial where the shares have increased significantly in value since you acquired them.

Since 30 October 2024, the main rates of Capital Gains Tax on shares, securities, unit trusts and other investments have been 18% and 24%. The rate that applies depends on your circumstances and, in particular, how much of your taxable gains fall within your unused basic-rate Income Tax band.

Gifts of qualifying shares and securities directly to a charity are generally exempt from Capital Gains Tax.

In addition to the Capital Gains Tax exemption, you may be able to claim Income Tax relief when you give qualifying shares, securities, units in certain collective investments, or qualifying interests in land to the Foundation.

For a straightforward gift of qualifying shares, the amount eligible for Income Tax relief will generally be based on the market value of the shares at the date of the gift, subject to the applicable tax rules. The qualifying amount can be deducted from your taxable income for the tax year in which you make the gift.

The detailed rules governing this relief depend on the type of asset and the circumstances of the gift. We recommend that you speak to your financial adviser or tax adviser if you are considering a significant donation or are unsure whether a particular asset qualifies.

How to give shares

The process is relatively simple. A stock transfer form is used to:

  • transfer the shares out of your name; and
  • transfer them into the Foundation’s name.

The Foundation has a stockbroker who normally handles these transfers on our behalf.*

If your investments are held through a broker or investment adviser, the transfer can usually be arranged by them in discussion with our broker. If you do not have a broker, we can provide you with the appropriate stock transfer form and guidance on completing the transfer.

For tax purposes, the date and value of the gift are important. We will provide written confirmation of the transfer to help you retain the appropriate records for your tax return.

* Please note that, where the value of donated shares is relatively small, broker fees may make it uneconomic to use an investment broker to handle the transfer. In such cases, the transfer may be possible using a stock transfer form without broker involvement. Please contact us to discuss the most appropriate approach.

What we do with donated shares

Depending on the nature and value of the shares donated, the Foundation may sell and reinvest them or retain them as part of its investment portfolio.

The Foundation has a small portfolio of investments built up from share donations from Old Sedberghian donors over recent years. The Trustees intend to build this portfolio into a substantial fund, generating income to support two new Roger Lupton Scholarships each year.

We recognise that achieving this objective will require a substantial capital sum, particularly given current investment returns. The Trustees believe that an endowed fund of this nature could provide valuable long-term support for the Roger Lupton Scholarship and Bursary Scheme.

What else do I need to know?

If you are considering donating another type of asset, such as land or property, different tax rules and conditions may apply. Please speak to your financial or tax adviser before making such a gift so that you can establish whether the asset qualifies for tax relief and understand the tax implications for your particular circumstances.

Tax rules can change and the information on this page is intended as general guidance only. It should not be regarded as personal tax or financial advice.

Proving the transfer has taken place

We will provide you with written confirmation of the transfer of your gift for your records.

You should retain this confirmation, together with any relevant evidence of the value of the shares or other asset at the date of the gift, as you may need it when completing your tax return.

Leaving shares or other assets in your will

If you are considering leaving shares or other assets to the Foundation in your will, you may be interested in our Free Wills Service (please contact the Foundation for more information), through which the Foundation may be able to arrange for you to have your will written or updated free of charge.

Our solicitors can advise you on the various options available when making a will, including charitable giving and inheritance tax, and can assist with establishing trusts where appropriate.

We recommend taking independent legal and financial advice when making or updating your will.

Further Information

If you would like to discuss making a contribution to support the work of the Foundation, please contact us or the Foundation Director on 015242 79217 or at foundation@sedberghschool.org.

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