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&#39Philanthropy is key to building a good reputation&#39

Providing advice on making tax-efficient donations to charity can help IFAs build their reputation with clients, according to experts.

Speaking at a seminar hosted by The Giving Campaign in London last month, Barclays executive director Heather Maizels, Rockefeller & Co managing director Kathryn McCarthy, Capital Guardian Trust Company president John Emerson and personal investment counsellor Bente Strong put the case for IFAs to prompt clients about giving to charity.

This is tax-effective for the clients and can also benefit the IFA, as it builds a personal reputation as a trusted adviser and not just a product salesperson, the seminar heard.

The Giving Campaign says the tax relief on charitable donations can be significant. For example, if listed shares are given to charity, full income tax relief is available. This would mean that if£1,000 of shares were don-ated to charity by a higher-rate taxpayer, then £400 income tax relief would be available and no capital gains tax would apply.

The organisation says the UK is well behind the US in encouraging donations. Its research shows that 90 per cent of financial advisers in the US raise the issue of philanthropy when discussing wealth management with their clients but only 18 per cent of UK-based advisers do the same.

The Giving Campaign has been established to combat this trend and to encourage a culture of giving in the UK. In conjunction with the FSA, it has launched a guide to tax-effective giving for financial advisers that it hopes will encourage them to advise their clients on the tax implications of charitable donations.

Maizels says: “Our business is about enjoying wealth and passing wealth on to younger family members and chosen causes.

“We see philanthropy as a strategic asset management tool in an overall wealth management strategy.”


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