Commentary

B5.852 Tainted donations

Business tax
Business tax | Commentary

B5.852 Tainted donations

Business tax | Commentary

B5.852 Tainted donations

FA 20111 introduced new anti-avoidance legislation to counteract the abuse of tax relief available to donors who gift to charities (including registered community amateur sports clubs — CASCs2, see Division B5.9) and it applies to relievable charity donations made on or after 1 April 2011. The legislation has been introduced following representations that the substantial donors legislation (see B5.851) was too cumbersome and administratively time-consuming. It disapplies some of the substantial donors legislation before 1 April 2013, and broadly repeals it from that date. However, contractual obligations entered into before 1 April 2013 continue to be covered by the substantial donors legislation, but where the contract is varied on or after that date the existing rules will then no longer apply and the situation will be considered under these new tainted donations rules3.

Relievable charity donations

Relievable charity donations are gifts or other disposals made by a person to a charity which are eligible for tax relief. The latter applies if, ignoring theses anti-avoidance provisions, tax relief would be available to the donor in respect of the donation under certain specified statutory provisions relating to income tax, corporation tax and capital gains tax, and/or the charity is entitled to claim a repayment of tax in respect of it4. The types of donations include payroll giving (see E4.1114), gifts of trading stock (see B2.442), gifts under gift aid (see E1.811), and gifts of shares, securities and real property (see E1.813). For these purposes an amount of income arising under

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial