Direct Answer
Businesses donating goods to charity generally do not account for output VAT, and donating trading stock attracts Corporation Tax relief. Gifting shares or land avoids capital gains tax: shares bought for £5,000 and now worth £20,000 escape CGT on the £15,000 gain. World Aid Network accepts qualifying asset gifts. Always take independent tax advice.
Charitable giving does not have to involve cash. UK businesses can donate stock, equipment and other goods to charity and claim relief from VAT and Corporation Tax. Individuals and businesses can donate land, property or qualifying shares and be exempt from Capital Gains Tax on any gain, while also claiming income tax or Corporation Tax relief on the market value.
These reliefs are significantly underused. Many business owners are unaware that donating trading stock to a charity can be more tax-efficient than selling it at a discount or writing it off. And many individual investors do not realise that donating appreciated shares directly to a charity avoids CGT entirely.
This guide explains how each relief works in 2026. It is for general information only and does not constitute tax advice. Always seek advice from a qualified accountant, solicitor or tax adviser before making a significant asset donation.
What is vAT relief on business donations to charity in 2026?
When a VAT-registered business donates goods to a charity, HMRC does not generally require the business to account for output VAT on the donation, provided the goods are given as a genuine gift with no expectation of return.
This means a business can donate surplus stock, equipment or other goods to a registered charity without having to charge or pay VAT on the market value of those goods.
However, if the business claimed input VAT when it originally purchased the goods, HMRC's position on whether the donation triggers a VAT liability (through the 'business gifts' rules) depends on the value of the items and the nature of the gift. Items costing the business more than £50 (excluding VAT) and given to a single recipient in a single year may trigger output VAT under the business gifts rules.
For donations to charities specifically, the rules are more favourable — but the detail matters. Seek advice from a VAT specialist before making a large in-kind donation.
What is donating stock to charity: Corporation Tax relief?
A UK limited company that donates trading stock or equipment to a qualifying charity can deduct the cost of the goods (not the market value) from its profits for Corporation Tax purposes. This is separate from any VAT treatment.
If the goods have a market value higher than their book cost, the company does not receive Corporation Tax relief on the uplift — only on the cost to the company. But the donation is still more tax-efficient than disposing of the stock as waste.
The goods must be donated to a qualifying charity. World Aid Network is a UK Charitable Incorporated Organisation with charity registration in progress and will qualify once registration is confirmed.
What is capital gains tax relief on donating land or shares to charity?
When an individual or company donates a qualifying investment — listed shares, unit trusts, qualifying unlisted shares, land or buildings — to a UK registered charity, two reliefs apply simultaneously.
First, the donor is exempt from Capital Gains Tax on any gain in the value of the asset since acquisition. This can be highly significant for assets held for a long time or appreciated substantially.
Second, the donor can claim income tax relief (individuals) or Corporation Tax relief (companies) on the full market value of the asset donated — not just the original cost.
For example: an individual holds shares originally purchased for £5,000 that are now worth £20,000. Selling the shares would trigger CGT on the £15,000 gain. Donating the shares to charity instead avoids the CGT entirely, and the donor can claim income tax relief on the full £20,000 market value through their self-assessment return.
This relief applies to qualifying investments donated to registered charities. It does not apply to assets sold to a charity at a discount — only to outright gifts.
How do you donate qualifying assets to World Aid Network?
World Aid Network is a UK Charitable Incorporated Organisation with charity registration in progress. We accept cash donations online, but we can also accept donations of qualifying shares or other assets by arrangement.
If you are considering donating shares, land or other assets to World Aid Network, please contact [email protected] in the first instance. We will discuss the proposed donation with our trustees and, where accepted, provide formal documentation to support your tax relief claim.
All non-cash donations accepted by World Aid Network are converted to cash and held in our restricted charitable funds, used strictly within our two charitable Objects.
Key takeaways
- Businesses donating goods to charity generally do not need to account for output VAT on the gift — but the rules depend on the nature and value of the goods.
- Donating trading stock to charity allows a UK company to deduct the cost of the goods from taxable profits for Corporation Tax purposes.
- Donating listed shares or land to charity exempts the donor from Capital Gains Tax on any gain, and allows income or Corporation Tax relief on the full market value.
- All reliefs are subject to qualifying conditions — always seek advice from a qualified accountant or tax adviser.
- World Aid Network accepts qualifying asset donations by arrangement — contact [email protected].
Frequently asked questions
Do I have to pay VAT when donating goods to a charity?
Generally no, for genuine gifts to a registered charity — but the rules depend on the nature and value of the goods and whether you claimed input VAT on purchase. Seek advice from a VAT specialist for significant donations.
Can I avoid Capital Gains Tax by donating shares to charity?
Yes. Donating qualifying shares directly to a UK registered charity exempts the gain from CGT entirely, and the donor can claim income tax relief on the full market value. Always seek independent tax advice before acting.
Does World Aid Network accept share donations?
Yes, by arrangement. Contact [email protected] to discuss a qualifying share or asset donation. We provide formal documentation to support your tax relief claim.
What happens to non-cash donations at World Aid Network?
Non-cash donations accepted by World Aid Network are converted to cash by the trustees and held in our restricted charitable funds, used within our two charitable Objects: sight-restoring surgery and cancer treatment, or emergency disaster relief.
This article was reviewed by the World Aid Network editorial team for factual accuracy against WHO, NHS, HMRC and Charity Commission sources. World Aid Network is a UK Charitable Incorporated Organisation (charity registration in progress), governed by named trustees.