We are often faced with questions from clients who want to know more about DAFs and how they compare with setting up a private foundation.
We hope that this list of frequently asked questions will also help you understand DAF's better.
How DAFs work
Our DAF provides you with a simple, flexible, tax effective and low cost way to give to charity. It offers the option of involving family members and of creating a lasting legacy. It also provides you with anonymity if you wish.
If you choose to donate cash to your DAF you may be able to claim gift aid and tax relief. This enables the DAF to claim the basic rate tax, increasing your charitable donation by 25% with no extra cost to you.
Gifts of qualifying, transferable shares to the DAF will not only be entitled to income tax relief on the value at date of donation, but any gain on those shares at the time of donation would not be subject to capital gains tax .
Assets held in your DAF are outside of your estate from day one so are not subject to inheritance tax.
Within your DAF, your funds can grow and generate income in a tax effective wrapper.
We understand that privacy is really important to many of our clients. Unlike with many private foundations and trusts, your name will not be on public record.
If you wish, grants from your DAF can be made anonymously to your chosen charities. We will only disclose you as the donor if you wish us to. This means that you will not be contacted directly by charities as a result of your grant.
If you want a way of attaching your family name to your giving, of building up a fund in a tax effective wrapper or of involving your family in philanthropy both now and in the future then you may think that a private charitable foundation is the answer. These can take many months to set up and can be costly to run with annual tax documents and charity commission reporting required.
However, our DAF is an excellent, cost effective and simple alternative to setting up your own private trust or charitable foundation and usually only takes a week to set up. You can name your DAF with your family name, involve your family in the giving decisions and create a lasting legacy.
Unlike with a private charitable foundation, we handle all the administration costs and tax reporting for you, leaving you time to really enjoy your philanthropy.
Involving your family is really simple with a DAF. Within your DAF you can name people other than yourself to make grants to charities (grant recommender). You can even add names of successors who you want to take over the allocation of grants on your death.
By involving your family, it is simple to create a lasting legacy with none of the legal documentation that could be needed to add new Trustees to a private family foundation.
We can even provide you and your family with guidance on how to develop a family philanthropy strategy to help ensure that your philanthropy is as effective as possible.
Your funds within your DAF will be managed in order to meet your objectives over whatever time period you wish.
We can help you maximise the income to give to charities now or grow the capital over time to form a larger fund for the future.
What's more, your funds grow within the tax effective wrapper of your DAF.
You can choose when you wish to make grants to charities and how much you wish to give. Just let your Client Advisor know.
You can make regular payments, give away income generated on the portfolio or donate lump sums; the choice is yours.
How to open a DAF
Unlike any costs usually associated with a private charitable foundation, we pay all the administration costs on your UBS DAF account. A fee will be charged for the management of assets in your DAF.
Yes, a UBS account is required in order to open a UBS DAF account. UBS Wealth Management accounts in the UK can be opened for individuals with investible assets in excess of £500k.
It is possible to open a UBS account and choose to only hold assets in the DAF account. Contact us if you would like to arrange a meeting and discuss opening an account with a Client Advisor.
There is no minimum amount required to open a UBS DAF account.
Paying into your DAF is simple. As long as you are a UK resident individual or company you can open a UBS account and a DAF.
You can pay into your DAF at any time and there is no minimum or maximum amount that can be paid in. Simply make a donation whenever suits you. Your Client Advisor will be able to carry out your instructions. All donations to your DAF are irrevocable.