We’re excited to invite you to partner with us in two vital opportunities to grow and sustain gospel ministry—both here at Dundonald Church and across London.
We’re raising funds to support Ministry Trainees—faithful men and women preparing for a lifetime of gospel service. Your generosity will help equip the next generation of gospel workers, not just for Dundonald, but for churches throughout London and beyond.
We’re also seeking to provide secure, long-term housing for gospel workers here at Dundonald. This is a practical and strategic need that will enable our leaders to live and serve in the community for many years to come.
Gifting and Loaning to Support a Church House Purchase (£50,000 Example)
This FAQ sheet provides guidance on the different ways individuals can financially support a church in purchasing a property, with notes on Gift Aid, tax implications, capital gains, and practical considerations. Always seek professional advice for your specific circumstances.
A straightforward donation (gift) is the simplest method. If you are a UK taxpayer, the church can claim Gift Aid, adding 25% to your donation. For example, a £50,000 gift becomes £62,500 for the church. Higher and additional rate taxpayers may also claim further relief through their tax return.
Gift Aid boosts donations by 25% at no extra cost to you, provided you have paid enough income or capital gains tax in that year to cover the claim. For example, a £50,000 donation becomes £62,500 for the church.
In this case, a loan may be appropriate. The church borrows from you and agrees to repay over time. There is no Gift Aid benefit for a standard loan, but it provides the church with immediate capital while preserving your ability to be repaid.
Yes. If you later waive (forgive) part or all of the loan, the waived amount can be treated as a donation, provided there is proper legal documentation and a valid Gift Aid declaration. For example, if you waive £50,000, the church can claim £12,500 in Gift Aid, totalling £62,500.
Pros: Flexibility in timing, the church gets funds early, and waived amounts still qualify for Gift Aid.
Cons: Requires legal documentation, and you must have paid enough tax in the year of waiver.
Yes. You must ensure you have paid sufficient tax to cover the Gift Aid claimed. If not, HMRC may require you to repay the shortfall. Always check your tax liability before committing.
Yes. If your income and tax fall in the current year, you can elect to treat donations as if made in the previous year (before filing your tax return). This is useful if you paid more tax in the earlier year.
Gifts to charities are usually exempt from inheritance tax. However, if you make very large gifts or waive large loans, these should be considered as part of your wider estate planning.
Instead of a flat 0% loan, some donors may structure their support so that the loan increases in value over time (e.g. a £50,000 loan growing to £75,000 over 7 years). This type of arrangement is not a charitable loan but an investment. The £25,000 growth must normally be declared to HMRC as taxable income or capital gain, depending on how it is structured.
If treated as interest, the uplift is subject to income tax. If treated as capital growth, it may fall under capital gains tax (CGT). Because the church is a charity, equity-style arrangements are unusual and may raise legal and tax complexities. Professional tax advice is strongly recommended before proceeding.
Yes. Donating publicly listed shares directly to a registered charity is permitted in the UK and can be tax-efficient. Please contact the Finance team if this option is of interest, as we have an arrangement with Stewardship for this giving option.
Tax position:
For significant donations or loans, especially those with equity-style returns, professional tax and legal advice is essential. This FAQ is for general guidance only.
Please find below the different options illustrated with £50,000 as an example.
| The Church | Donor/Lender | |||||
|---|---|---|---|---|---|---|
| Option | How it works | Financial benefit for the church | Pros | Cons | Pros | Cons |
| Gift | Give £50,000 directly; Gift Aid adds £12,500. | £62,500 | Simple No repayment Gift Aid claimable | None | Tax relief when the donation is made | Funds cannot be returned |
| Equity loan | Loan increases in value (e.g. £50,000 to £75,000). Growth taxed as income or capital gain. | £50,000 loan capital; uplift not a donation | Access to capital with no interest payable. | Legal documentation required. Capital (plus valuation increase) to be repaid at the end of the loan term. | Original funds (plus valuation increase) returned at end of the loan term. | Tax implications of a capital gain. Professional tax and financial advice recommended. |
Key Reminders
