LogoLogo
Recap HomeCrypto Tax Guide (Lite)HMRC Cryptoassets Manual
  • A Technical Guide to Cryptocurrency Tax for UK Individuals
    • What are Cryptoassets?
    • Who are Recap?
  • CRYPTOCURRENCY TAX
    • Do I Need to Pay Tax on my Cryptoassets?
    • Which Taxes Apply?
      • Capital Gains Tax (CGT)
      • Income tax
      • VAT
      • Inheritance tax
      • Stamp Duty
    • How Much Tax Will I Pay?
    • New HMRC DeFi Guidance
      • Overview of HMRC guidance
      • 1️⃣Is the Reward Income or Capital?
      • 2️⃣Is Beneficial Ownership (BO) transferred?
      • 3️⃣Consider the Tax Treatment
        • Staker/Lender/Collateral Provider
          • Income Rewards
            • BO transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Income Reward
              • Example 1A
              • Example 2A
            • BO not transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Income Reward
              • Example 1B
              • Example 2B
          • Capital Rewards
            • BO transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Capital Reward
              • Example 1C
              • Example 2C
            • BO not transferred
              • ➡️At Point of Entry
              • ⬅️At Point of Exit
              • 💧On Liquidation
              • 💎On Receipt of Capital Reward
              • Example 1D
              • Example 2D
        • Borrower
    • Investor or Trader?
      • Badges of Trade Limitations
      • HMRC Approach
      • Court Cases involving Financial Traders
    • Capital Gains Tax
      • Calculating the Capital Gains Position
      • Disposal proceeds
      • Disposals to Connected Parties
      • Allowable costs for CGT
        • Exchange fees
        • Forks - affect on allowable costs
      • Capital Loss Claims
    • Income Tax
      • Financial trading income
      • Miscellaneous Income
      • Employment income
    • Fair Market Valuation
  • TRANSACTION TYPES
    • 💷Selling Crypto for Fiat
    • 🔄Trading Crypto to Crypto
    • 🛍️Purchases using Crypto
    • 🎁Gifts
    • 💍Spouse Transfers
    • 🎗️Gifts to Charity, CASCs & Bodies for a National Purpose
    • 🎈Airdrops
    • 🤝Staking
    • 💸Transfers
    • 🍴Forks
    • ⛏️Mining
    • 👛Employment income
      • UK Employer
      • Overseas employer
      • National Minimum Wage (NMW)
    • 🚨Lost & Stolen Crypto
    • 🎲Gambling
    • 💧Liquidity Pools
      • Example - Liquidity pool
    • ⬆️Token Upgrades/Swaps
    • 🔮Cryptoasset derivatives (CFDs, Futures and Margin Trading)
    • 💼Crypto Loans
    • 🔄REPOS
    • 🪞Reflections Rewards
    • 👥Referral Income
    • 💳Cashback
    • 🎨NFTs (Non Fungible Tokens)
    • 🎮NFTs earned playing games
  • Record Keeping
  • Filing Your Self-Assessment
    • How to Register for Self-Assessment
    • How to Fill In the Tax Return
    • Submitting the Tax Return and Paying the Tax
Powered by GitBook
On this page
  • CGT Relief
  • Definition of a charity for tax relief purposes
  • Tainted donations
  • Gift aid income tax relief
  • Gifts to Charity in Recap

Was this helpful?

  1. TRANSACTION TYPES

Gifts to Charity, CASCs & Bodies for a National Purpose

PreviousSpouse TransfersNextAirdrops

Last updated 3 years ago

Was this helpful?

CGT Relief

Relief from capital gains tax is given in respect of disposals of assets to the bodies below when the recipient pays less than the allowable CGT costs of acquisition for the cryptoasset, providing it is not a :

  • a community amateur sports club (CASC), or

  • a body for a National Purpose (ie British Museum)

Where this relief applies, the disposal is treated as being made for no gain and no loss. Therefore the disposal proceeds are deemed to equal the allowable CGT costs.

There is no relief if it is a ‘tainted donation’ (see below) or when the recipient pays the donor more than the allowable CGT costs.

The recipient can pay an individual donor up to the acquisition cost of the cryptoasset and the donor will not realise a capital gain on the disposal (as it is treated as a disposal at no gain and no loss). Therefore it does not need to be an outright gift to the charity.

If the consideration given by the recipient, though not full market value, is nevertheless greater than the allowable costs, the disposal is treated as made for the actual consideration given (rather than the full market value at the date of disposal) and the resultant capital gain will be chargeable.

Definition of a charity for tax relief purposes

UK income tax reliefs were extended to charities based in the European Economic Area in 2010 (so charities based in the UK, Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Iceland, Liechtenstein and Norway).

The definition of a charity is a body of persons or a trust that is:

  • solely established for a charitable purpose;

  • under the jurisdiction of the UK courts or the courts in a relevant territory;

  • compliant with the registration conditions in the UK (register of charities) or a similar requirement in the relevant territory; and is

  • managed by fit and proper persons.

Charities established in England and Wales must satisfy the definition in the Charities Act 2011. A ‘charity’ is established for charitable purposes and is subject to the control of the High Court’s charity-law jurisdiction.

There are thirteen broad charitable purposes:

  • prevention or relief of poverty;

  • advancement of:

    • education;

    • religion;

    • health or the saving of lives;

    • citizenship or community development;

    • the arts, culture, heritage or science;

    • amateur sport;

    • human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;

    • environmental protection or improvement;

  • relief of those in need because of youth, age, ill-health, disability, financial hardship or other disadvantage;

  • advancement of animal welfare;

  • promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire and rescue services or ambulance services; and

  • any other purposes reasonably analogous to the above.

Charitable purposes also extend to recreational (i.e. CASCs) and similar trusts and those that under the previous definition are within the spirit of the new definition of charitable purposes. Purposes that are not for public benefit cannot be charitable purposes. The requirement is that the purpose must benefit the public generally (or a sufficient section of the public) and not give rise to more than incidental personal benefit. The purpose must be beneficial, and any detriment or harm must not outweigh the benefit.

Tainted donations

Relief from CGT is not available where a person makes a 'tainted donation', or any associated donation. In order to be tainted, a donation must meet all three conditions below:

  • The donor, or a person connected with him (both known as a linked person), makes arrangements (whether before or after the donation is made) and it is reasonable to assume that the donation and arrangements would not have been made or entered into independently of each other

  • The main purpose, or one of the main purposes, of entering into the arrangements is that the linked person (other than a charity) obtains a financial advantage either directly or indirectly from the charity that received the donation, and

  • The donor is not a qualifying charity-owned company, or a relevant housing provider linked with the charity to which the donation is made.

Gift aid income tax relief

Donations of cryptoassets do not qualify for the gift aid income tax relief and any other income tax relief.

Recap has been designed from the ground up to work out the capital gains impact of gifting cryptoassets to charity.

  1. Simply connect your exchange accounts or wallets through our automated integrations or enter your data manually via the user interface or CSV file.

  2. Recap treats gifts to charity as a no gain/no loss disposal

  3. See the tax impact of every gift (example below) in the tax tab or download a PDF tax report

a UK, EU or EEA charity ()

Income tax relief is only available for donations of fiat currency or certain other assets (shares, listed securities, property) to UK/EU/EEA qualifying charities as per the .

Gifts to Charity in

🎗️
Recap
see definition below
definition above
tainted donation