11 June 2024

Charitable gifting through trusts

Have you thought about gifting to charities – and what might be the best way to go about it? Chris Thurlow explains why charitable trusts can offer a rewarding and tax-efficient way to maximise the money a charity receives from you.

Ludlow Trust Company specialises in setting up and running charitable trusts, and also offers a matching service, bringing together over 5000 charities with philanthropists seeking charitable funding opportunities. 

What is a charitable trust?

A grant-making charitable trust is a charity registered with the Charity Commission (or equivalent).  The funds of the trust are used to make grants to charities and other organisations for charitable purposes and public benefit. 

Why set up a charitable trust?

Grant-making charitable trusts are a great way to make a social impact and engage the next generation, in a tax efficient way. From funding your favourite theatre to safeguarding your local schools or supporting global climate change initiatives – and everything in between. However niche or broad the cause, well-invested wealth can help make a difference.

Leaving a legacy

Charitable trusts can help you to leave a lasting legacy, allowing you to support causes close to your heart. They can be created at any time and forming a trust now allows you to decide how it runs and to build and scale it as you wish. 

Engaging the next generation

Starting a charitable trust can help involve and engage future generations with the world of charitable giving as well as assets and investments. Older children can learn important lessons about investing through observing how a charitable trust is run and helping manage it, while young children can start to understand how family wealth can be used to help others. Consider the long-term value of engaging with your family in deciding which charitable causes to benefit.

Image for tax position on a gift of £500,000 to charity

Very compelling tax reliefs

Charitable trusts benefit from exceptionally compelling tax reliefs. For an additional rate taxpayer, the cost of setting up a new charitable trust may be about half of the total value of the trust – in practice this means a £500,000 trust only costs £275,000 if using Gift Aid – an example is over the page. Even greater benefits are available where you gift investments which would normally be subject to capital gains tax, which can be effectively written off by gifting the investments to charity. This could involve transferring assets currently in a JM Finn Portfolio into a charitable trust, with the trust assets continuing to be managed at JM Finn. There is also an opportunity to transfer single line holdings, which can then be sold tax free and invested in a diversified portfolio, or indeed other external portfolio assets. These benefits also extend to giving via your will, where a gift of 10% of your estate to charity could end up only costing your family around 2.5%.

Ludlow Trust Company is a Trust Corporation, which allows us as a corporate body to act as your professional trustee. This means that when Ludlow Trust Company is appointed, our team – led by your dedicated Trust Manager – will be on hand to seamlessly deliver informed, personalised guidance at every step.  We also have years of experience in advising on trusts for family members, wills and estate planning.


The information provided in this article is of a general nature and is not a substitute for specific advice with regard to your own circumstances. You are recommended to obtain specific advice from a qualified professional before you take any action or refrain from action.

Understanding Finance

Helping clients understand what we do is key to building relationships. To explain some of the industry jargon that creeps into our world, we’ve pulled together a section of our site to help.

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