Stocks and Shares

Information for UK Old Members

Since 2000 the government has made changes to dramatically expand tax incentives for charitable gifts. These changes also cover gifts of stocks and shares and you may wish to use our Stocks & Shares Calculator to work out whether it would be tax efficient for you to give shares to the College. In order to qualify you must transfer the shares to the College directly, not the proceeds of those shares.

The following investments qualify for tax relief:

  • Shares and securities listed or dealt in on the UK Stock Exchange, including the Alternative Investment Market
  • Shares and securities listed or dealt in on recognised foreign stock exchanges
  • Units in an authorised unit trust (AUT)
  • Shares in a UK open-ended investment company (OEIC)
  • Holdings in certain foreign collective investment schemes - broadly, schemes established outside the UK equivalent to unit trusts and OEICs
  • The whole of a beneficial interest in a qualifying interest in land and buildings.

For more information about giving stocks and shares, please see the HM Revenue & Customs' information.

Information for US Old Members

There can be some advantages for old members living in the USA wishing to give gifts of securities. If the Old Member has held stock for at least one calendar year, and the stock has appreciated (gained) in value, it is more advantageous to give stock rather than cash.

The IRS permits a donor to take the fair market value of the stock on the day given (the day it enters the charitable organization's account). Therefore, if a donor originally bought stock at $100 a share, and it has appreciated to $200 a share, they would be able to take a charitable deduction for $200 (to the extent allowed by IRS regulations based on adjusted gross income). If the donor sold the stock and then gave the proceeds as a gift, a capital gains tax would be applied. If the stock has not appreciated, and actually lost value, the donor would be better off selling the stock, taking a capital loss on it and receive a tax benefit for making a charitable gift.

The benefit is of course greatest when the cost (basis) of the stock and its market value are far apart, which is usually when the stock has a basis close to zero. So it works best for founders of companies or individuals with management options (who can donate the unexercised options in which they have zero basis and get a 45% approx tax credit against market value). It is more popular (a) when markets are high and (b) when people have higher incomes against which to use the credit.

If you would like to give in this way to Exeter College please contact the University of Oxford North American Office, who will be able to process your donation through American Friends of Oxford, Inc.