Introduction A US citizen living in the UK who wants to support a UK charity faces a problem that most advisers cannot solve: the donation is not deductible on the US federal return. It may not qualify for UK Gift Aid unless the giving structure is correct. Specialist US expat tax services that cover cross-border […]
A US citizen living in the UK who wants to support a UK charity faces a problem that most advisers cannot solve: the donation is not deductible on the US federal return. It may not qualify for UK Gift Aid unless the giving structure is correct.
Specialist US expat tax services that cover cross-border philanthropy ensure that every pound given to a UK cause generates the maximum available tax relief in both jurisdictions. The difference between a structurally efficient and an inefficient gift can exceed 45 percent of the donation’s value — meaning the charity receives significantly less without expert planning.
This guide explains how cross-border charitable giving works for US citizens in the UK in 2026. It covers donor-advised funds, dual-qualified charities, Gift Aid for US donors, the IRA charitable rollover, donations of appreciated stock, and Charitable Remainder Trusts. Contact Jungle Tax at https://www.jungletax.co.uk/ to structure your giving program.
US expat tax services for charitable giving address the central problem of cross-border philanthropy: a direct gift from a US citizen to a UK charity is not deductible on the US federal return — because the IRS allows deductions only for contributions to US-qualified organizations under Section 170 of the Internal Revenue Code. The UK charity is not a US-qualified organization. The gift does not generate a US federal tax deduction, regardless of the amount.
At the same time, a US citizen who gives directly to a UK charity may not automatically attract UK Gift Aid — because Gift Aid requires the donor to have paid sufficient UK income tax to cover the Gift Aid reclaimed by the charity. A US citizen who has used the Foreign Earned Income Exclusion to eliminate UK tax on their employment income may not have sufficient UK tax to support a Gift Aid claim.
Specialist US expat tax services resolve both problems simultaneously — using structures that generate a US federal tax deduction and, where possible, UK Gift Aid on the same gift.
High-net-worth US citizens living in the UK are among the most philanthropically active individuals in the country. Many support UK universities, arts institutions, and charities that have no US-qualified status. Without specialist advice, every direct gift to these institutions is made from after-tax income, with no relief in either jurisdiction.
The IRS guidance on charitable contributions is published at:
This guide covers US citizens living in the UK who make — or plan to make — significant charitable gifts to UK or international causes and who want to maximize the tax efficiency of their giving in both jurisdictions.
The Tax Cuts and Jobs Act increased the US standard deduction to $29,200 for married filing jointly in 2024. For most US citizens, itemizing deductions — including charitable deductions — is only worthwhile if total itemized deductions exceed the standard deduction. A US citizen in the UK who gives £20,000 to a UK charity with no US deduction available is giving from after-tax income, with no itemized deduction to show for it. Structured giving through a donor-advised fund or dual-qualified charity changes this entirely.
Gift Aid allows a UK charity to reclaim 25p for every £1 donated from a taxpayer who has paid at least that amount in UK income tax during the year. For a US citizen living in the UK who pays UK income tax — through PAYE or self-assessment — Gift Aid is available on direct gifts to UK charities. The donor can also claim higher-rate relief on the gift through their UK self-assessment.
However, a US citizen who has eliminated UK income tax through the Foreign Earned Income Exclusion or the Foreign Tax Credit may not have paid sufficient UK tax to support a Gift Aid claim. The adviser confirms Gift Aid eligibility before the gift is made — and recommends the appropriate structure where direct Gift Aid is not available.
A donation of appreciated shares to a US-qualified charity — including a donor-advised fund — eliminates the capital gains tax on the appreciation in both the United Kingdom and the United States. The donor receives a US federal deduction for the full fair market value of the shares. No US capital gains tax arises. No UK CGT arises because the disposal is a charitable donation, which is exempt from UK CGT. This is one of the most efficient giving structures available to a US citizen in the UK.
Our guide to year-end tax planning for US-UK global portfolios covers capital gains planning strategies in detail.
A donor-advised fund is a US-qualified charitable vehicle administered by a US-based sponsoring organization. The donor makes an irrevocable contribution to the DAF, which generates an immediate US federal charitable deduction under Section 170. The assets in the DAF are then invested and grow tax-free. The donor recommends that grants from the DAF be made to chosen charities — including UK charities — at any future date.
The key advantage for a US citizen in the UK is that the DAF contribution is US-deductible — even though the ultimate beneficiary is a UK charity. The DAF’s sponsoring organization conducts its own due diligence on the UK charity and makes the grant on the donor’s behalf. Major US DAF sponsors that make international grants include Fidelity Charitable, Schwab Charitable, and CAF America.
The contribution to the DAF can be made in cash, appreciated securities, or other assets. The deduction is limited to 60 percent of adjusted gross income for cash contributions and to 30 percent for appreciated property. Excess contributions can be carried forward for up to five years. A specialist US expat tax services adviser calculates the optimal annual contribution amount to maximize the US deduction.
Some UK charities have established dual-qualified status — meaning they are registered both as a UK charity (qualifying for Gift Aid) and as a US-qualified organization under Section 501(c)(3) (qualifying for US federal deductibility). Major UK institutions with dual-qualified status include certain universities, arts organizations, and cultural institutions.
A gift to a dual-qualified charity generates both a US federal charitable deduction and UK Gift Aid. The combined tax efficiency of a dual-qualified gift exceeds any other cross-border giving structure. The adviser identifies whether the chosen UK charity has dual-qualified status — and, where it does not, recommends the DAF route as the next most efficient alternative.
CAF America — the Charities Aid Foundation America — is a US 501(c)(3) that makes grants to UK charities on behalf of US donors. A contribution to CAF America is US-deductible. CAF America then vets the gift and transfers it to the chosen UK charity. For UK charities without direct dual-qualified status, CAF America is the most accessible route to US deductibility.
The IRA charitable rollover — also called the qualified charitable distribution — allows a US person aged 70½ or over to transfer up to $105,000 per year directly from a traditional IRA to a US-qualified charity. The distribution is excluded from US taxable income — it does not generate ordinary income as a normal IRA distribution would. It also satisfies the required minimum distribution obligation for the year.
For a US citizen in the UK who is subject to RMDs on a traditional IRA, the charitable rollover eliminates the US income tax on the RMD amount and simultaneously satisfies the RMD requirement. The UK does not tax IRA distributions where the Article 17 treaty election has been made — so the rollover is also UK-tax-neutral.
The rollover must go directly to the qualifying charity — not to a DAF or a private foundation. The charity must be a US 501(c)(3) organization. A UK charity with dual-qualified status qualifies. The adviser confirms the charity’s status before the rollover is arranged.
The adviser begins by understanding the donor’s giving objectives — which causes they support, which UK charities are the intended beneficiaries, and the annual giving budget. The adviser then reviews the donor’s full tax position: UK income and tax paid, US adjusted gross income, appreciated assets available for donation, IRA balances and RMD status, and the carry-forward position of any prior charitable deductions.
The adviser confirms the dual-qualified status of each intended beneficiary charity. For charities without dual-qualified status, the adviser identifies the appropriate DAF route or CAF America as the vehicle for US-deductible giving.
The adviser calculates the optimal DAF contribution amount for the current year — the amount that maximizes the US federal deduction without creating excess carry-forward. For a donor with significant appreciated assets, the adviser models the contribution of appreciated shares to the DAF — eliminating capital gains and generating a deduction at fair market value.
The timing of the contribution matters. A DAF contribution must be completed before 31 December to generate a US deduction in the current tax year. Gift Aid declarations for direct UK charity gifts must be in place before the donation is made. The IRA charitable rollover must be executed before 31 December to satisfy the RMD for the current year.
The adviser confirms whether the donor has paid sufficient UK income tax in the current year to support Gift Aid claims on direct donations to UK charities. Where the donor is a UK higher-rate taxpayer, the adviser ensures that the Gift Aid deduction is claimed on the UK self-assessment, generating additional higher-rate relief beyond the basic-rate relief reclaimed by the charity.
Where the donor has eliminated UK income tax through the FEIE or FTC, the adviser recommends routing the gift through a DAF or CAF America to secure US deductibility — and advises on the Gift Aid position separately.
The adviser reviews the donor’s investment portfolio to identify appreciated positions — shares with a large unrealized gain that would generate significant capital gains tax if sold. The adviser calculates the US CGT saving from donating the shares directly to the DAF rather than selling them and donating the cash proceeds. The shares are transferred directly from the brokerage account to the DAF — without a sale triggering CGT in either jurisdiction.
The HMRC guidance on charitable giving and tax relief is published at:
https://www.gov.uk/topic/running-charity/money-fundraising
The adviser conducts an annual review of the giving program — updating the DAF contribution calculation, reviewing the appreciated positions available for donation, confirming Gift Aid eligibility for the current year, and coordinating the grant recommendations from the DAF to the chosen UK charities. The review is integrated with the annual US and UK tax return preparation — ensuring that the charitable deductions appear correctly on both returns.
Helena is a US citizen living in London. She is a partner in a UK law firm. Her UK taxable income is approximately £280,000. She pays UK income tax at the additional rate. She also files a US federal return annually. She holds a traditional IRA in the United States with a current value of $420,000 — she is 71 and has begun taking RMDs.
Helena wants to support three UK causes: a London arts institution, a Cambridge college, and a children’s hospice charity. She gives approximately £40,000 per year. None of the three charities had US-qualified status when she contacted Jungle Tax.
Jungle Tax established a program using three components. First, Helena opened a donor-advised fund with CAF America. She contributed £30,000 of appreciated shares — US technology stocks with a cost basis of approximately £8,000 — to the DAF. The contribution generated a US federal deduction of approximately $37,500 (at the current sterling/dollar rate) and eliminated the capital gains on the £22,000 of appreciation in both jurisdictions. No UK CGT arose on the transfer to the DAF.
Second, the Cambridge College was identified as a dual-qualified organization — it holds direct US 501(c)(3) status. Helena made a separate direct gift of £10,000 to the college. The gift attracted UK Gift Aid — the college reclaimed £2,500 from HMRC. Helena claimed higher-rate relief of £5,000 on her UK self-assessment (the additional 25p per £1 on a higher-rate gift). The gift was also deductible on her US federal return as a contribution to a US 501(c)(3).
Third, Helena used the IRA charitable rollover to transfer $20,000 directly from her traditional IRA to CAF America — satisfying part of her RMD obligation for the year without generating US taxable income. The rollover was UK-tax-neutral under the Article 17 election.
The combined giving program cost Helena approximately £40,000 in contributions. The effective net cost — after all US and UK tax relief — was approximately £18,000. The arts institution, the college, and the hospice received their full intended donations. The DAF holds the remaining balance of the appreciated stock contribution for future grant recommendations to the hospice charity.
Contact our US expat tax services team at hello@jungletax.co.uk or 0333-8807974 to design your cross-border giving program.
A direct gift from a US citizen to a UK charity that is not US-qualified generates no US federal charitable deduction. The donor gives from after-tax income in both jurisdictions. Over a ten-year, $10,000-per-year giving program, the foregoing US deduction at a 37 percent federal rate represents approximately $ 181,850 in total deductions. Routing the gift through a DAF or CAF America resolves this entirely.
Gift Aid requires the donor to have paid UK income tax — in the relevant year — at least equal to the Gift Aid reclaimed by the charity. A US citizen who has used the FEIE to eliminate UK income tax on employment income may not have paid sufficient UK tax to support a Gift Aid claim. Signing a Gift Aid declaration in these circumstances is incorrect — the charity may be required to repay the Gift Aid to HMRC. The adviser confirms the donor’s UK tax position before any Gift Aid declaration is signed.
Selling appreciated shares and donating the cash proceeds to a charity generates capital gains tax in both the UK and the United States on the appreciation. Donating the shares directly to a DAF or a US-qualified charity eliminates both UK CGT and US federal CGT. Because the disposal is a charitable gift, it is exempt from UK CGT and is not recognized as a taxable disposal for US federal CGT purposes. A donor who sells shares with £50,000 of appreciation and donates the cash loses approximately £10,000 in UK CGT and $10,000 in US CGT — a combined cost of approximately £18,000 — that could have been eliminated by donating the shares directly.
A US citizen aged 70½ or over who takes RMDs from a traditional IRA and gives to charity should always consider the IRA charitable rollover. The rollover transfers up to $105,000 per year directly from the IRA to the charity, excluding the distribution from US taxable income and satisfying the RMD. A donor who takes the RMD as a taxable distribution and then gives the after-tax proceeds to charity pays US income tax on the distribution unnecessarily. The charitable rollover eliminates this tax cost.
The IRS guidance on IRA charitable rollovers is published at:
A DAF contribution that exceeds the applicable AGI limit — 60 percent for cash, 30 percent for appreciated property — generates an excess that can be carried forward for up to five years. Many donors do not track the carry-forward balance — and therefore fail to claim the excess deduction in subsequent years. The adviser tracks the carry-forward balance and ensures it is claimed on each subsequent return until it is exhausted.
Jungle Tax is a specialist US-UK cross-border tax advisory firm whose team includes IRS Enrolled Agents and UK-qualified tax practitioners with specific experience in designing tax-efficient cross-border giving programs for US citizens in the UK. Our US expat tax services for philanthropy cover: confirming the dual-qualified status of your chosen UK charities; establishing the DAF or CAF America structure for US-deductible international giving; calculating the optimal annual DAF contribution amount — in cash or appreciated shares — to maximise the US federal deduction without creating unnecessary carry-forward; confirming Gift Aid eligibility and claiming higher-rate relief on your UK self-assessment; executing the IRA charitable rollover where applicable; and integrating the entire giving programme with your annual US and UK tax return preparation. You can find further information on our page at https://www.jungletax.co.uk/, or read our guide to HNW families with US and UK assets — estate and succession planning. Contact our team at hello@jungletax.co.uk or call 0333-8807974 today.
Cross-border charitable giving for a US citizen in the UK is not straightforward — but with specialist US expat tax services, every gift can generate maximum relief in both jurisdictions. The difference between structured and unstructured giving can exceed 45 percent of the donation’s value.
Three points matter most. First, a direct gift to a UK charity that is not US-qualified does not generate a US federal deduction. The DAF or CAF America route is essential for US deductibility. Second, appreciated shares should be donated directly — not sold first. Donating the shares eliminates capital gains tax in both jurisdictions and provides a deduction equal to the full fair market value. Third, the IRA charitable rollover eliminates US income tax on RMD distributions for donors aged 70½ or over — and simultaneously satisfies the RMD obligation. It is one of the most efficient charitable tools available and is systematically underused.
Speak to a Jungle Tax adviser today — contact us at hello@jungletax.co.uk or visit https://www.jungletax.co.uk/ to design your cross-border giving program.
Not from a direct gift — unless the UK charity has direct US 501(c)(3) status. A direct contribution to a UK charity that is not US-qualified does not generate a US federal charitable deduction under Section 170. To obtain a US deduction for a gift to a UK cause, you need to route the gift through a US-qualified vehicle — such as a donor-advised fund, CAF America, or a dual-qualified charity with direct US 501(c)(3) status. Specialist US expat tax services identify the appropriate vehicle for each intended beneficiary and ensure the gift is structured to maximize the available US deduction.
A donor-advised fund is a US-qualified charitable vehicle administered by a sponsoring organization such as Fidelity Charitable, Schwab Charitable, or CAF America. The donor makes an irrevocable contribution to the DAF, which generates an immediate US federal charitable deduction. The assets are invested and grow tax-free. The donor recommends that grants from the DAF be made to chosen charities — including UK charities — at any future date. The DAF’s sponsoring organization conducts due diligence on the UK charity and makes the grant on the donor’s behalf. This structure generates a US deduction even for gifts to UK charities without direct US-qualified status.
Yes — if you have paid sufficient UK income tax in the relevant year to cover the Gift Aid reclaimed by the charity. Gift Aid allows the charity to reclaim 25p for every £1 you donate — but only where you have paid at least that amount in UK income tax. A US citizen who pays UK income tax through PAYE or self-assessment can sign a Gift Aid declaration and claim additional higher-rate relief on their UK self-assessment return. A US citizen who has eliminated UK income tax through the Foreign Earned Income Exclusion or the Foreign Tax Credit should confirm their Gift Aid eligibility with a specialist adviser before signing any declaration.
The IRA charitable rollover — also called the qualified charitable distribution — allows a US person aged 70½ or over to transfer up to $105,000 per year directly from a traditional IRA to a US-qualified charity. The distribution is excluded from US taxable income — unlike a normal IRA distribution, which is taxable as ordinary income. The rollover also satisfies the required minimum distribution obligation for the year. The charity must be a US 501(c)(3) organization — a UK charity with dual-qualified status qualifies. The rollover cannot go to a DAF or a private foundation. For US citizens in the UK with significant IRA balances, the charitable rollover is one of the most tax-efficient giving tools available.
Donating appreciated shares directly to a donor-advised fund or a US-qualified charity eliminates capital gains tax on the appreciation in both the United Kingdom and the United States. You receive a US federal deduction for the full fair market value of the shares, including the appreciation. No US capital gains tax arises on the disposal. No UK CGT arises — because a charitable donation of shares is exempt from UK CGT. If you sell the shares first and donate the cash, you pay CGT in both jurisdictions on the appreciation before donating. Donating the shares directly can save tens of thousands of pounds in combined tax on a large appreciated position.
Your adjusted gross income limits the US federal charitable deduction. Cash contributions to US-qualified charities are deductible up to 60 percent of AGI. Contributions of appreciated property — shares, securities — are deductible up to 30 percent of AGI. Contributions to a donor-advised fund are subject to the same limits. Excess contributions that cannot be deducted in the current year can be carried forward for up to five years. A specialist adviser calculates the optimal contribution amount for each year to maximize the current-year deduction and manage the carry-forward balance across subsequent years.
