Meet our Expert

Tony Austin – Chartered Accountant

Tony is an accountant who has been involved with the not-for-profit sector for over 15 years. He was previously National Charity Tax Partner with a major firm of accountants and now works as an independent tax consultant, advising charities and donors on tax issues. He also writes and lectures on direct tax issues for charities and is a member of the Charities Tax Group. 


“We had understood that at a charity sale (in this case a church sale), that items belonging to the person handed over for the church to sell on their behalf, in our case these were a collection of my husband’s paper weights and ornaments, if we kept a clear trail of the amount raised by the sale of his items and he filled in a form afterwards to say that the items were his, he could then donate the proceeds and it could be gift aided. We have in the past when a number of people gave a significant number of items, marked them and kept a record of what has sold of theirs (like a charity shop would) and then afterwards they filled in a form as above donating the proceeds from the items that had been given by them.  For simplicity we only did this with donations of £10 and above.  It is the same principle as for charity shops. Our new Gift Aid Officer was advised by HMRC over the phone that it is not valid. Can I ask your opinion?”

Gift Aid can only be claimed on a donation of money, not a donation of property. If donors ask the charity to sell the item for them and then, when they know the amount involved, the donors agree that the charity can keep the proceeds, then Gift Aid can be claimed. In that situation, the donors owns the goods until they are sold and, at the time of sale, the proceeds belong to the donors and the charity has no legal right to keep the money.

If in the above question, the husband could have asked for the proceeds of his items to be given to him by the church but decided after they were sold that he would donate the money to the church instead, then the donation would qualify for Gift Aid, assuming all other conditions were met. If however the husband gave the items to the church to keep or dispose of them as it wished and had no legal right to ask for them back or ask for the proceeds of sale, then there has been a donation of goods to the church and Gift Aid cannot be claimed.

The person asking the question says that they donated “the proceeds of the items that had been given by them”.  The person cannot donate both the items and the proceeds. If “given” by them means handed over to be sold on their behalf, then the proceeds can later be donated.