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Sir Elton John Tops Charity Donation List With £26.8M

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http://www.dailymail.co.uk/news/article-3544559/Sir-Elton-John-JK-Rowling-charity-list-singer-gave-27million-good-causes-year.html

Sir Elton John has topped a list for most generous celebrities, after giving £27million to good causes last year.

The 69-year-old singer gave most of the cash to his Aids foundations in Britain and America.

JK Rowling was the second most generous celebrity with £10.3million generated and donated by her childrens' charity Lumos Foundation and the Volant Charitable Trust, which funds research into multiple sclerosis.

1. Elton John - £26.8m

2. JK Rowling - £10.3m

3. David Beckham - £5.0m

4. Martin Lewis - £2.5m

5. Coldplay - £1.7m

6. RIngo Starr - £1.6m

7. Jamie Oliver - £1.4m

8. Rory McIlroy - £1.0m

9. Colin Montgomerie - £0.9m

10 = One Direction - £0.8m

10 = Brian May/ Roger Taylor - £0.8m

Not sure over some of the stats/headline here is the money from personal donations or money from fund raises?

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Most of it ends up either with the executives or the banks - it's remarkable how you never see charities asking for money in bank branches but they're always at the till in the supermarkets.

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Good to see, but don't forget that charity giving is very financially sensible for a lot of wealthy people, especially the ones that can control the charity spend. Not saying any on the list are doing that, but numbers do not tell everything.

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I would imagine that it is a mix of personal donations and fund raises.

Elton John does an enormous amount of fund raising I believe - parties? But someone, such as JK Rowling, could merely be taking advantage of tax regs to off-set her income against tax? So perhaps 10 million is not that much considering her alleged income and how much she could potentially claim back from the taxman by contirbuting to charity?

Potentially, loads of 'ordinary' Britons are actually donating a far higher percentage of their yearly earnings to charity than many celebs.

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Good to see, but don't forget that charity giving is very financially sensible for a lot of wealthy people, especially the ones that can control the charity spend. Not saying any on the list are doing that, but numbers do not tell everything.

Of course. It's the only properly-sanctioned[1] tax-dodge against income tax without a cap below the level of some of those (the highest cap on anything else is EIS at £1m, with VCT a poor third at £200k annual cap).

[1] i.e. unless the recipients of the fund screw up, you're not at risk HMRC will turn round and chase you for the money even if they've turned a blind eye in the past.

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I don't understand the mechanics of this tax dodge idea..

Say I earn £100m, I give £20m to charity and can claim back all the tax on it.

Say I get back £16m, I'm still down £4m.

The only way I can see it would work is if the charity was the Libspero benevolent foundation which gifted me back a proportion of the money again in leaner times.

But that sounds a bit dodgy.. I can't imagine you can actually do that.

Am I missing something?

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I don't understand the mechanics of this tax dodge idea..

Say I earn £100m, I give £20m to charity and can claim back all the tax on it.

Say I get back £16m, I'm still down £4m.

The only way I can see it would work is if the charity was the Libspero benevolent foundation which gifted me back a proportion of the money again in leaner times.

But that sounds a bit dodgy.. I can't imagine you can actually do that.

Am I missing something?

One way is you set up a charity for poor wombats. Which your wife runs.

Funnily enough, it needs a private jet and a mansion with stables for the wombat managers....

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I don't understand the mechanics of this tax dodge idea..

Say I earn £100m, I give £20m to charity and can claim back all the tax on it.

Say I get back £16m, I'm still down £4m.

The only way I can see it would work is if the charity was the Libspero benevolent foundation which gifted me back a proportion of the money again in leaner times.

But that sounds a bit dodgy.. I can't imagine you can actually do that.

Am I missing something?

Well, in your scenario you were going to pay the 20 million in tax no matter what. But, re your scenario, you get the 16 million back so paying 4 million in tax as opposed to paying the 20 million. So you have 16 million more than you would have and the love and adoration of journalists who do not understand the tax system.

In the 80s you would have bought a forest or a salmon farm in Scotland.

Yes, the money donated usually goes to Libspero benevolent foundation which is registered as a charity - you not only then to decide whom to make charitable donations to from it but you can also pay yourself a salary out of it. You can pay salaries to your family and friends as employees of the charity. Even pay pensions.

In fact, your Libspero benevolent foundation charity can go years and years without ever paying a single penny in a charitable donation to anyone or anything.

You could, if you were really wealthy, have loads of charitable foundations and funds.

What a lot of the really wealthy are now doing is sticking their entire wealth into a charitable foundation - their own. They then can pay themselves large sums out of it, expenses, etc, and it effectively is run as a company but with the tax benefits of being a charity - so you could be the CEO of the charity and your wife and kids, in time, take over that position... and so it gets passed down through the family.

Putin and various Russians were criticised for, allegedly, setting up banks in Russia to do something similar. Here in the West rich people set up charities. There have been a few dot.com billionaires who have done such things in recent years and the media has excitedly reported how generous they are that they are leaving all their cash to charity - are they heck!?

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One way is you set up a charity for poor wombats. Which your wife runs.

Funnily enough, it needs a private jet and a mansion with stables for the wombat managers....

Wombats need daily spa and massage treatments.

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There used to be a book that you could get on loan from libraries called something like The Register of Grant-Making Charities - for the UK.

It listed thousands of grant-making charities in there - some of them set up over a 100 years ago. You could read about people who had left their life savings to give grants or scholarships in certain fields - a few hundred quid per year for someone to go study fine art or to do X, Y or Z.

But also there would be listed the charities set up by seriously wealthy people. Some of them would show milions donated each year. But loads would show very little, if any, donations made. Lots of running costs though ;)

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Charity annoys me, as it is impersonal. I like kindness however, and it can be a simple as getting a big bag of potatos home for an old lady who is not strong enough to carry them, and it costs nothing. Pin-up! :rolleyes:

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Clearly I wasn't being creative enough..

I get more disillusioned with charities by the day.. They all seem to be full of profiteers with their hands in the till these days

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I don't understand the mechanics of this tax dodge idea..

You're looking for something that isn't there (unless someone has a seriously dodgy wheeze that fully deserves to be knocked down).

Under UK law, every charitable donation with gift aid saves tax. Which makes it one of the best tax dodges going, especially for the richest.

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The fact this story has appeared now backs up a certain 'guide' linked to noticing things referred to on another thread recently. Interesting to see it in action.

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I don't understand the mechanics of this tax dodge idea..

Say I earn £100m, I give £20m to charity and can claim back all the tax on it.

Say I get back £16m, I'm still down £4m.

I don't understand your numbers. You give £20m to charity, the charity claims £5m gift aid from HMRC, you reclaim 25% of the gross £25m. Your personal bank balance is indeed down by 70% of the original £20m. But that's fine: job accomplished, the money has gone somewhere of your choosing, not to the clutches of HMRC. That is, after all, the whole purpose of money.

Though I suspect you'd be hard-pressed to find anyone with quite that much taxable income in the UK. Do even a footballer/popstar couple get £100m in a year?

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I don't understand your numbers. You give £20m to charity, the charity claims £5m gift aid from HMRC, you reclaim 25% of the gross £25m. Your personal bank balance is indeed down by 70% of the original £20m. But that's fine: job accomplished, the money has gone somewhere of your choosing, not to the clutches of HMRC. That is, after all, the whole purpose of money.

Though I suspect you'd be hard-pressed to find anyone with quite that much taxable income in the UK. Do even a footballer/popstar couple get £100m in a year?

I assumed that lib's numbers were entirely random - just a generalisation.

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Generous ...

What % of their money is it?

I recall an article where the Beckhams gave some impressive sounding sum of money to a charity, with accompanying publicity in national press etc. Somebody pointed out that if they were a couple on the average national salary, the sum of money donated would be equal to about twelve pounds. I'm not blaming them - as celebrity couples go the Beckhams aren't too bad and I think they were genuinely being helpful - but it does put things in perspective.

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The fact this story has appeared now backs up a certain 'guide' linked to noticing things referred to on another thread recently. Interesting to see it in action.

Yes it's remarkable what you can find out online these days about all sorts of things that don't get mentioned in the press.

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You're looking for something that isn't there (unless someone has a seriously dodgy wheeze that fully deserves to be knocked down).

Under UK law, every charitable donation with gift aid saves tax. Which makes it one of the best tax dodges going, especially for the richest.

Ok, I don't have an issue with a "tax dodge" for genuinely charitable donations where the person making the donation isn't really making any personal gain.. It seems to be the government saying, if you give some money to charity, we'll match a percentage of it.

My figures made sense to me at 3am (the joy of sick children), I think my logic was that if you paid £20m post tax, the pretax amount would have been about £36m at a tax rate of 45% making the tax £16m (assuming you could claim it all back).

Everything else was arbitrary. Any number of assumptions are probably wrong. It made sense in my head at the time :)

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The gift aid - does it work like at the charity shops?

https://www.gov.uk/guidance/gift-aid-what-donations-charities-and-cascs-can-claim-on

After the goods are sold (but before the charity makes a Gift Aid claim) the charity shop writes to the owner of the goods to advise them of the net sale proceeds. HMRC provides template letters for the Standard Method, Method A and Method B for you to download, print and use.

Other template letters are available for:

Method A for where the £100 limit has been exceeded
Method A where subsequent sales are made after the £100 limit has been exceeded
Method B for sales above the £1,000 limit
The charity shop must give the individual at least 21 days to respond to this letter before it treats the net sale proceeds as a donation to the charity.

I am pleased to tell you that proceeds from selling your goods raised a further
£XX.XX in excess of £100 (net of after commission and VAT). This will allow the
Charity to reclaim an additional £YY.YY in Gift Aid.
To donate this amount to our charity you need do nothing further. If we do not hear
from you within 21 days of the date of this letter, we will assume that you wish to
donate the £XX.XX raised to our charity and, once again, we thank you for your
continued support.
Please also contact us within 21 days if:
a) you expect to pay less than £ZZ.ZZ (the cumulative gift aid claimed year to
date) in UK Income and / or Capital Gains Tax in this tax year to cover the Gift Aid
amount claimed back by the charity or
B) your personal details, such as name and address, have changed.
If you have paid insufficient tax to meet the Gift Aid claimed by the charity, HMRC
may seek to recover this sum from you direct, as it is your responsibility to pay any
difference.

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