Making a charity contribution to reduce your tax bill

Governments around the world will let their citizens reduce a potential tax bill if they make contributions to charitable causes. The charity generally must be registered with the relevant authority to allow the taxpayer to benefit from any deduction.

The type of tax and how it is calculated will also be relevant, some contributions will reduce an income tax bill by reducing the income that is accessible whilst others will reduce the tax percentage that is applied.

Below are some examples for the different types

Singapore

If you make a contribution to a registered charity in Singapore, your donation is tax deductible against your income tax assessment. Furthermore, your donation will be deductible at 2.5 times the original amount. For example, a $300 donation will mean $750 being deducted from assessable income.

Cash donations must be made to an approved Institution of a Public Character (IPC) or the Singapore Government for causes that benefit the local community. Not all registered charities are approved IPCs. Therefore, donations made to a charity without approved IPC status are not tax-deductible. To check if the charity you want to donate to is registered - https://www.charities.gov.sg/Pages/Home.aspx

The amount is automatically deducted from income assessment at the time of your income tax submission in April each year

UK

Leaving a part or your entire estate to charity can reduce, and in some situations, eliminate the Inheritance Tax liability. If you leave something to charity in your will, then it won’t count towards the total taxable value of your estate.

This is called leaving a ‘charitable legacy’. You can also cut the Inheritance Tax rate on the rest of your estate from 40% to 36%, if you leave at least 10% of your ‘net estate’ to a charity.

Australia

When completing your tax return, you're entitled to claim deductions for gifts. Organisations that are entitled to receive tax deductible gifts are called 'deductible gift recipients' (DGRs). You can only claim a tax deduction for gifts or donations to organisations that have a DGR.

A tax deduction for most gifts is claimed in the tax return for the income year in which the gift is made. However, you can elect to spread the tax deduction over five income years in certain circumstances.

Check if you can make a charity deduction for your country and reduce a potential tax bill whilst helping your designated charity

Markets....

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The percentage allocated to this strategy depends on the risk profile, investment objectives and most importantly, the investor’s age.