Cross border charitable giving

I still live in the US, but since my Mum passed away I've been giving some money to her church in the UK. It's not a recognized US charity and so I don't exclude those payments from my US taxes and as I'm not a UK tax payer the church doesn't get Gift Aid on the money. i was wondering if there's a simple fix to get the church the Gift Aid; just gift the money to a UK tax payer and then ask them to make the donation to the church along with a Gift Aid declaration.

I still live in the US, but since my Mum passed away I've been giving some money to her church in the UK. It's not a recognized US charity and so I don't exclude those payments from my US taxes and as I'm not a UK tax payer the church doesn't get Gift Aid on the money. i was wondering if there's a simple fix to get the church the Gift Aid; just gift the money to a UK tax payer and then ask them to make the donation to the church along with a Gift Aid declaration.

That sounds a bit risky as the money you would gift to a UK tax payer to then gift to the church was never subject to UK tax so should not qualify for UK tax relief when donated to a charity. The gift aid system is for HMRC to give back tax payer money to charities from money that has already been taxed.

That sounds a bit risky as the money you would gift to a UK tax payer to then gift to the church was never subject to UK tax so should not qualify for UK tax relief when donated to a charity. The gift aid system is for HMRC to give back tax payer money to charities from money that has already been taxed.

Yes that was what I thought too, but the money has been taxed...just in the US so I wonder if the DTA might apply in some round about way ;-) Or think of it like this, I'm giving money to a UK resident, they just happen to use their own UK income that's been taxed in the UK to give to the charity. There are dual registered conduit charities that will help, but they are set up for big donations and charge big fees.

Yes that was what I thought too, but the money has been taxed...just in the US so I wonder if the DTA might apply in some round about way ;-) Or think of it like this, I'm giving money to a UK resident, they just happen to use their own UK income that's been taxed in the UK to give to the charity. There are dual registered conduit charities that will help, but they are set up for big donations and charge big fees.

Still sounds like a scam to me unless you can quote from the DTA that states that UK charities can get money refunded from UK taxpayers for donations that have never been taxed by HMRC. I’ll leave it there, just my opinion.

Still sounds like a scam to me unless you can quote from the DTA that states that UK charities can get money refunded from UK taxpayers for donations that have never been taxed by HMRC. I’ll leave it there, just my opinion.

I tend to agree with the spirit of what you are saying, but my gift to the UK tax payer requires no reporting and is not taxable. So what's to stop said UK tax payer from using their own money that they have earned in the UK, and paid tax on, to make a charitable donation and do a Gift Aid declaration? The only reason why I probably won't do it is because my wheeze would involve someone else and I would never ask anyone to do anything not 100% ok.

I tend to agree with the spirit of what you are saying, but my gift to the UK tax payer requires no reporting and is not taxable. So what's to stop said UK tax payer from using their own money that they have earned in the UK, and paid tax on, to make a charitable donation and do a Gift Aid declaration? The only reason why I probably won't do it is because my wheeze would involve someone else and I would never ask anyone to do anything not 100% ok.

For sure, if someone asked me to do what you suggest I would refuse, regardless of whether or not I thought I might get audited because I believe it is circumventing the law. But that is just my moral compass which I realize is unique to me.

Gift Aid was one of the questions I asked my UK/US tax advisor about in my last catch up with them about a month ago. For what it's worth, he basically aligns with durhamlad. Paraphrasing, the advice I got was 'If you want to donate to charity in a US/UK manner, the best way is to make a single large donation to one that operates in both countries' - which doesn't really fit with the idea/purpose of gift aid.

I should point out in passing that many organizations (Oxfam, Red Cross, Comic Relief, etc) are actually legally and organizationally separate (but affiliated) organizations in each country they operate in. Meaning the organization you donate to in the UK may not be registered charity in the US despite nominally operating in both. Oxfam's Wiki page (https://en.wikipedia.org/wiki/Oxfam) for example shows the 21 affiliated organizations and the respective countries they operate in.

I didn't ask my tax advisor (as I have FTC), but I think if you aren't claiming any FTC (or are claiming FEIE but are under the exclusion limit) gift aid wouldn't be problematic.

My practical workaround for donations to charity shops was to give them to a (tax paying) relative to donate. My workaround for entrance fees to places like Slimbridge Wildlife Trust is to allow someone else to pay my share, then pay them back.

Don't get me started on the Co-op card.

Gift Aid was one of the questions I asked my UK/US tax advisor about in my last catch up with them about a month ago. For what it's worth, he basically aligns with durhamlad. Paraphrasing, the advice I got was 'If you want to donate to charity in a US/UK manner, the best way is to make a single large donation to one that operates in both countries' - which doesn't really fit with the idea/purpose of gift aid.

I should point out in passing that many organizations (Oxfam, Red Cross, Comic Relief, etc) are actually legally and organizationally separate (but affiliated) organizations in each country they operate in. Meaning the organization you donate to in the UK may not be registered charity in the US despite nominally operating in both. Oxfam's Wiki page (https://en.wikipedia.org/wiki/Oxfam) for example shows the 21 affiliated organizations and the respective countries they operate in.

I didn't ask my tax advisor (as I have FTC), but I think if you aren't claiming any FTC (or are claiming FEIE but are under the exclusion limit) gift aid wouldn't be problematic.

My practical workaround for donations to charity shops was to give them to a (tax paying) relative to donate. My workaround for entrance fees to places like Slimbridge Wildlife Trust is to allow someone else to pay my share, then pay them back.

Don't get me started on the Co-op card.

We have donated to Plan International for many years and continued to do so once we returned to England but we switched to their UK website and completed the gift aide form. We also changed all our other charities to be my name only since I am in the higher 40% bracket, so that as part of my annual UK self assessment I get a tax break as well as the charities.

Gift Aid was one of the questions I asked my UK/US tax advisor about in my last catch up with them about a month ago. For what it's worth, he basically aligns with durhamlad. Paraphrasing, the advice I got was 'If you want to donate to charity in a US/UK manner, the best way is to make a single large donation to one that operates in both countries' - which doesn't really fit with the idea/purpose of gift aid.

I should point out in passing that many organizations (Oxfam, Red Cross, Comic Relief, etc) are actually legally and organizationally separate (but affiliated) organizations in each country they operate in. Meaning the organization you donate to in the UK may not be registered charity in the US despite nominally operating in both. Oxfam's Wiki page (https://en.wikipedia.org/wiki/Oxfam) for example shows the 21 affiliated organizations and the respective countries they operate in.

I didn't ask my tax advisor (as I have FTC), but I think if you aren't claiming any FTC (or are claiming FEIE but are under the exclusion limit) gift aid wouldn't be problematic.

My practical workaround for donations to charity shops was to give them to a (tax paying) relative to donate. My workaround for entrance fees to places like Slimbridge Wildlife Trust is to allow someone else to pay my share, then pay them back.

Don't get me started on the Co-op card.

I'm in the US and donate to some UK organizations that have "American Friends" charities and take the IRS deduction. But I also give to a couple of small UK charities and that money gets no deduction for me as they aren't US charities and no Gift Aid as I'm not a UK tax payer. The solution for the "well heeled" is a dual qualified donor fund like NTP Transatlantic, but they have minimum account values of maybe $50k and take hefty fees.

My solution of asking a UK tax payer to make the donation out of their own UK taxed income and claim the Gift Aid and then gifting the UK tax payer an equal amount might be seen as a deliberate tax dodge if the UK tax payer wasn't going to make the donation in the first place. If my UK resident relatives give money to UK charities I imagine they claim Gift Aid and I still send them money each Christmas. The only difference is that I don't expect them to do anything specific with my annual gift. The tax effect is the same, it's just the intent that differs.

FYI, I just got an answer on the "HMRC Community" forum about my "scheme" and HMRC says that it's perfectly ok and the contribution would be  made by the UK tax payer and so Gift Aid can be claimed.

FYI, I just got an answer on the "HMRC Community" forum about my "scheme" and HMRC says that it's perfectly ok and the contribution would be  made by the UK tax payer and so Gift Aid can be claimed.

Excellent, thanks for letting us know.

I still live in the US, but since my Mum passed away I've been giving some money to her church in the UK. It's not a recognized US charity and so I don't exclude those payments from my US taxes and as I'm not a UK tax payer the church doesn't get Gift Aid on the money. i was wondering if there's a simple fix to get the church the Gift Aid; just gift the money to a UK tax payer and then ask them to make the donation to the church along with a Gift Aid declaration.

US gift tax possible, UK PET for IHT purposes comes to mind.  Why not use a dually qualified charity or DAF?

US gift tax possible, UK PET for IHT purposes comes to mind.  Why not use a dually qualified charity or DAF?

I'm in the US with no exposure to UK taxes at the moment. Each year I give to a couple of UK churches that my Mother attended and the amounts are below the US annual gift tax allowance. I have family members in the UK with UK taxable income so I thought that simply asking them to make the gifts and reimbursing them was a cheap and simple way to get the Gift Aid.

If I move back to the UK I think dual qualified DAFs will become important, particularly in estate planning, although I don't imagine US IHT will ever be an issue.