COMMENT
Win, Win, Win By Giving Shares Away!

By sipping a glass of wine, I broke one of my New Year's resolutions on Tuesday evening, but at least it was all in a good cause!

I was at a cheery reception at the Treasury to celebrate the enormous success of ShareGift, a charity that turns unwanted shares into hard cash for good causes. Since its launch in 1996, Sharegift has raised over £6 million for good causes, simply by recycling unwanted shares into charitable gifts. ShareGift has distributed funds to around 700 different UK-registered charities – some large and well known, others small and community-based.

During the reception, we learned that one firm had raised an extra million for ShareGift simply by cleaning up its shareholder register, boosting the total funds raised to £6 million. Well done to the big-hearted staff and shareholders of energy company Centrica (formerly part of British Gas)!

You, too, can do your bit to help good causes – and your finances - by donating unwanted shares to ShareGift.

Many stock-market investors own small parcels of shares that they hang on to purely because it would cost more to sell them than they are worth. For example, perhaps you've made a howler and ended up with a shareholding that's worth a fraction of its original cost? This is remarkably common in these post-dotcom days (Marconi, anyone?). Alternatively, you may have small numbers of shares due to reinvesting dividends, or following a rights issue or other corporate reorganisation. Another possibility is that you've been given a few shares as the result of an inheritance and don't want to hold on to them.

To me, these small shareholdings are nothing but an irritation. For example, you may still receive small dividends on your holding and so have to account for these on your tax return. Also, if you've already exceeded your CGT allowance, you may be liable to Capital Gains Tax if you sell even a single surplus share. Unwanted annual reports and other shareholder documents may also bother you.

The trick to unlocking this "dead" capital is to hand over your unloved share certificates to ShareGift. First, this enables you to avoid any CGT, because gifts to charities don't create a gain or loss for CGT purposes (not creating a capital loss is the main drawback to gifting shares but then just one in every thousand people pay CGT anyway).

Second, and more importantly, ShareGift can help you to shrink your income tax bill. If you hand over shares to ShareGift, you can claim income tax relief on their value. So, shares worth £25 would mean a £10 rebate for a higher-rate (40%) taxpayer, or £5.50 for a basic-rate taxpayer. Every little helps – and I'm sure that you and the charity will be glad of the extra cash!

Also, ShareGift helps people who wish to make larger donations to their favourite charity. Indeed, some charities are unable to handle donations of shares themselves and so rely on ShareGift's expertise to do this for them. What's more, listed companies are among ShareGift's biggest fans, because the charity helps them to clean up their shareholder registers and hence reduce their communication costs and paperwork. So you're doing your bit for the environment, as well!

How to donate shares

Even if you've lost or mislaid your share certificates, you can still help ShareGift. Simply contact the company's registrars, whose details are shown on dividend vouchers or other shareholder communications, including company websites. For small holdings, there is usually no charge for issuing duplicate certificates – and it won't do any harm to ask for any fee to be waived, since the proceeds are intended for Sharegift.

After you've sent your share certificates and a simple donation form to ShareGift, it will send you a ready-to-sign "stock transfer form" to autograph and return. You are welcome to suggest a charity or good cause when sending in shares. Once it has received these documents, ShareGift will transfer your shares into its name and roll them up with others before selling them. Sharegift is able to sell donated shares at no charge, thanks to the continuing generosity and support of stockbrokers Killick & Co.

Although ShareGift usually receives paper certificates, you can also donate shares that are held in a nominee (online or electronically registered) account. Simply contact ShareGift for advice or ask your stockbroker to contact ShareGift to arrange this.

Finally, ShareGift always welcomes donations to support its free service. So, if the stock market has been kind to you in recent years, how about assisting ShareGift to help you and many others to become better off?

More: ShareGift | What To Do With Old Share Certificates | Giving Shares To Charity.

Many thanks to all at ShareGift for their hospitality at the reception on Tuesday.