A gift to a UK charity is generally not deductible on a US return. The IRS lists contributions to foreign organisations among those you cannot deduct, with exceptions only for certain Canadian, Israeli and Mexican charities under those treaties, as Publication 526 (opens the official IRS page in a new tab) sets out. The US-UK treaty contains no equivalent rule. The UK side is different: if you pay enough UK tax, Gift Aid and the other UK reliefs still work for you.
This post is for US citizens living in Britain who give to UK causes and want to know what each return allows. It goes deeper on one question than our guide to avoiding US-UK double taxation. We cover the US rule, what the treaty does and does not say, Gift Aid and payroll giving, the effect on your foreign tax credit, giving through a US organisation, a worked example and the records to keep.
Can a US citizen deduct a donation to a UK charity?
Generally no. A US charitable deduction needs a qualified organisation, and for the usual charity that means one created or organised under the laws of the United States. A UK registered charity is not one. The foreign exceptions in US guidance cover certain Canadian, Israeli and Mexican organisations only, so a UK gift is outside them.
This surprises people because the UK charity is genuine and fully recognised by HMRC. Recognition in one country does not carry across. The IRS topic on charitable contributions (opens the official IRS page in a new tab) says only qualified organisations can receive deductible gifts It does not matter how well known the UK charity is or how long it has been registered.
The rule is the same whatever form the gift takes. Cash, a standing order, a gift of shares or a legacy pledge to a UK charity are all outside the US deduction. Where a treaty does allow a foreign charity deduction, as with Canada, the relief is usually limited by reference to income from that country. The UK treaty has no such article, so there is no UK-source route either.
- UK registered charities are not US qualified organisations
- Treaty exceptions in US guidance name Canada, Israel and Mexico only
- Cash, shares and property given to a UK charity are treated alike
- HMRC recognition of a charity has no effect on the US return
Does the US-UK tax treaty give any charitable relief?
No relief for donors. The current income tax treaty, published on the IRS UK treaty documents (opens the official IRS page in a new tab) page, has no article allowing a US citizen or resident to deduct gifts to UK charities, or the reverse. Its only charity provision treats exempt charities as residents of their home country, which concerns the charity's own income.
That residence rule lets a UK charity claim treaty rates on US investment income, for example, and lets a US charity do the same in the UK. It says nothing about the person giving the money. Some other US treaties, such as the one with Canada, do contain a donor deduction, which is why the point is often misreported for the UK.
Even if a treaty article existed, a US citizen would also have to clear the saving clause, which lets the United States tax its citizens as if the treaty were not in force apart from listed exceptions. Our post on the treaty saving clause explains how that list works. For UK charity gifts the question does not arise, because there is nothing in the treaty to preserve.
How does Gift Aid work for an American paying UK tax?
Gift Aid works for anyone who pays enough UK Income Tax or Capital Gains Tax in the tax year, whatever their nationality. You give the charity a declaration, the charity reclaims basic rate tax on your gift from HMRC, and a higher or additional rate taxpayer can claim further relief personally.
The condition that matters is the UK tax paid. The GOV.UK page on Gift Aid (opens the official GOV.UK page in a new tab) says you should sign a declaration only if your UK tax for the year covers what the charity will reclaim, and HMRC may ask you to pay the difference if it does not. A US citizen with little UK income, or one whose UK tax is covered by allowances, should check before signing.
Higher rate relief is claimed through a Self Assessment (opens the official GOV.UK page in a new tab) return or by asking HMRC to adjust your tax code. On the return you can also ask for gifts made after the tax year ends to be treated as made in the year being reported, provided the return is filed by the deadline, which is 31 October on paper or 31 January online. Our UK Self Assessment service handles these claims on the SA100.
- Payroll Giving takes the donation from pay before Income Tax is worked out
- Shares given to a charity carry Income Tax relief on their value
- No Capital Gains Tax is due on shares or land given to a charity
- Tell each charity if you stop paying enough UK tax
Does Gift Aid reduce the UK tax you can credit?
It can. Higher rate relief on Gift Aid, payroll giving and relief for gifted shares all lower the UK tax you finally owe. The foreign tax credit on Form 1116 is based on the UK tax actually due, so the figure carried to the US return should be the liability after charitable relief, not before it.
For a basic rate taxpayer the effect is usually nil, because the charity reclaims the basic rate tax and the donor's own UK bill does not change. The difference shows up for higher and additional rate taxpayers. Their UK tax falls, the Form 1116 (opens the official IRS page in a new tab) credit falls with it, and some of the US liability that the credit used to cover may reappear, though often only partly.
Payroll giving has a further wrinkle. The donation is taken before UK tax, so UK taxable pay is lower than gross pay. The US return starts from gross wages, and a gift to a UK charity is not deductible, so the full pay stays in US income. Reconcile the payslip to the Form 1116 credit with that in mind, and keep the P60 alongside the charity receipts.
Can you give through a US charity instead?
Sometimes. A gift to a US qualified organisation can be deductible even if the work it funds is in Britain, but not if your gift is simply earmarked for a named foreign charity. The US organisation must approve the programme as part of its own purposes and keep control over how the money is used.
That control test comes from Publication 526 (opens the official IRS page in a new tab), and it is applied to the facts rather than to the organisation's name. A US body that runs its own UK programme, or that decides for itself whether to fund a UK partner, can pass. One that passes donations on to a UK charity you chose does not. Ask the organisation how it handles foreign grants before relying on the deduction.
Even a qualifying gift only helps if you itemise. For tax year 2025 the standard deduction is $15,750 for a single filer or someone married filing separately and $31,500 on a joint return, and many Americans in the UK claim it. Legislation passed in 2025 adds, from tax year 2026, a limited deduction for cash gifts by people who do not itemise, and a floor below which itemised gifts give no deduction.
- The recipient must be a US qualified organisation
- Earmarking a gift for a named UK charity defeats the deduction
- The non-itemiser deduction covers cash gifts only
- Donor-advised funds and supporting organisations are excluded from that deduction
- The organisation's written acknowledgment is needed for larger gifts
What does a worked example look like?
Take a US citizen employed in Leeds who pays higher rate UK tax and gives monthly to a UK hospice under Gift Aid. She also donated shares in a UK company to a medical research charity during the year. She files a UK Self Assessment return and a US Form 1040 (opens the official IRS page in a new tab), claiming the foreign tax credit.
On the UK side she claims higher rate relief on the hospice gifts and Income Tax relief on the value of the shares in the charitable giving section of her return. No Capital Gains Tax is due on the shares she gave. Her UK liability for the year is lower as a result, and that lower figure is the one that goes onto Form 1116.
On the US side neither gift is deductible, because both charities are UK bodies. Her credit is smaller than it would have been, and a modest US balance may now remain on her wages. The US treatment of the gifted shares, including the cost basis she held them at, is reviewed separately. Whether any of this matters depends on her figures, which our individual tax returns service works through on both returns together.
What records should you keep for both returns?
Keep evidence of every gift, the Gift Aid declarations you signed, and any acknowledgment from a US organisation. The UK records support your relief claims. The US records matter only for gifts to US qualified organisations, and they also show why the UK gifts were left off your Form 1040.
For UK purposes GOV.UK asks higher rate taxpayers claiming relief to keep the date, the amount and the charity for each gift, and for shares, the legal paperwork for the transfer. For US purposes, gifts to qualified organisations need a bank record or written communication, and larger gifts need a contemporaneous written acknowledgment from the organisation. Keep both sets together so the two returns can be checked against each other.
Charitable giving rarely changes the shape of a cross-border return, but it does move the numbers. The interaction with the credit is covered in our guide on avoiding double taxation, and our treaty relief service reviews the UK figure that goes onto the credit. If you give regularly to UK causes and want both returns to reflect it correctly, contact us and we will review your position.
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
