In certain specific circumstances some payments, which are not strictly gifts can be treated as donations for Gift Aid purposes.

Gifts of goods

Donations of goods to your charity can not be Gift Aided - Gift Aid only applies to gifts of money.

Your charity can, however, act as an agent for a prospective donor by selling goods on their behalf in the hope of having the proceeds (money) donated under Gift Aid.

For any eventual donation to qualify:

• the goods must remain the property of the potential donor until they are sold – it's the donor who is selling the goods not your charity
• the donor must have the right to keep all or part of the proceeds of the sale
• your charity must contact the donor after a sale has been made and offer to pay them the proceeds from the sale of their goods
• if the donor chooses instead to donate some or all of the money to your charity this will be a straightforward donation of money to you and can therefore be Gift Aided
• your charity must keep a record of the proceeds of the sale being offered to the donor along with their decision to gift them to you eg an exchange of correspondence
• if you ask the donor to complete a Gift Aid declaration before the sale (in anticipation of the proceeds being gifted to you) the wording of that declaration must not commit the donor to making a donation – the donor must retain a choice.

For more information about gifts of goods please see the detailed guidance notes about Gift Aid for charities.

Donations that attract a right of free admission to view a charity property

Some charities charge visitors for the right of admission to view a charity property. Such admission charges do not qualify for Gift Aid. But if a charity allows visitors an equivalent right of free admission in return for a donation, Gift Aid may apply.

There are two alternatives:

• If, a visitor chooses to make a payment which is at least 10% more than the day admission charge, and in return you allow a day's admission, then the whole payment can be treated as a donation.
• If a visitor makes a payment and in return your charity allows the right of entry to view a charity property for at least one year the payment can be treated as a donation.

Donations in either category will be qualifying Gift Aid donations only when they are supported by an appropriate declaration.

The donor's right of entry to view a property must be exactly the same as for visitors paying the normal admission price to view the same property.

All visitors must be offered a clear choice about whether they make a donation or pay the normal admission price for entry to view a charity's property.

Any extra benefits (e.g. commemorative pen, teddy etc) provided in return for the donation are subject to Gift Aid benefit limits. For more information see the guidance about benefits provided for donors.

There are special rules about payments for family admission. For more information see the detailed guidance about donations that attract a right of free admission to view charity property.

Further information

• Gift Aid benefits
• donations that attract a right of free admission to view charity property

Membership subscriptions

Subscriptions for membership of a UK charity can, at the discretion of HMRC Charities, be treated as donations, provided the payment:

• does no more than secure membership of the charity
• does not allow personal use of the charity's services or facilities

e.g. a youth charity providing various activities as part of its educational objectives would not be providing services or facilities for personal use.

Any other benefits provided by your charity as a consequence of the donation (membership subscription) are subject to Gift Aid benefit rules.

Paying other people's subscriptions

Payment made by one person for somebody else's membership is not a gift to your charity and will not therefore qualify as a Gift Aid donation – except where the payment is made on behalf of a minor child (age under 18).

For more information about membership subscriptions please see the detailed guidance notes on Gift Aid for charities.

If you are a Community Amateur Sports Club (CASC) your members’ subscriptions are excluded from the Gift Aid scheme.

For further information about CASCs please see the guidance for CASCs.

Charity auctions

When an individual successfully bids for goods or services at a charity auction their payment can, at the discretion of HMRC Charities, be treated as a donation.

However, all other Gift Aid rules apply so the goods or services the donor receives in return for their successful bid count as a ‘benefit’ received as a consequence of their donation. Such benefits are subject to strict benefit limits based on value of the auction lot in relation to the amount of the donation made. The practical outcome is that most charity auction donations do not qualify for Gift Aid.

For more information please see the guidance about benefits for donors.

Valuing the benefit of auction lots

• If the auction lot is commercially available then that commercial value can be used as the value of the benefit, eg a football in the local team's colours available in local shops.
• If the goods or services are not commercially available then the value of the item is what it is worth to the successful bidder, which is what he is prepared to pay for it. eg a football in the local team's colours signed by the England squad would not be available at the local shops. A bidder is likely to be prepared to pay more for such an item because it is unique.
• In certain limited circumstances the successful bidder can choose to buy the benefit and treat the balance of their successful bid as a donation.

Why most charity auction donations don't qualify for Gift Aid

In most circumstances your charity will not be able to claim Gift Aid when you receive a donation as a result of a successful auction bid because:

• where an auction lot is commercially available the successful bidder will have to pay much more than the commercial value of an auction lot in order for their donation to qualify for Gift Aid relief.
• where there is no commercial value (as in many auctions where the goods are unique “celebrity” items or personal services offered on a one-off basis) then the successful bid represent the value of that lot to the successful bidder. The benefit equals the donation i.e. the benefit is 100% of the donation and will therefore fail the benefit rules.

Option to buy the benefit

In certain very limited circumstances where an auction lot is commercially available and where that commercial value has been made clear before the auction (and in all promotional literature) the successful bidder can choose to ‘buy the benefit’ and treat the balance of their successful bid as a donation. However, they must make it clear at the time they pays that they want to buy the benefit.

For more information please see the detailed guidance about charity auctions.