The following Trusts and Inheritance Tax guidance note Produced by Tolley in association with Speechly Bircham LLP provides comprehensive and up to date tax information covering:
Charities are not exempt from taxation, but they do benefit from a number of specific tax reliefs.
A charity does not need to be registered with the Charity Commission to qualify for tax relief. For example, if the charity is excepted, exempt or is too small to be registered, the charity will not lose its tax relief.
Strictly, a charity loses tax relief if it becomes subject to a requirement to register as a charity but registration does not occur (see FA 2010, Sch 6, Part 1, para 3). However, in practice a short delay in registering as a charity, once a requirement to register has arisen, is unlikely to prejudice the availability of tax reliefs.
Before a charity can take advantage of these tax reliefs and make tax repayment claims, it needs to be formally recognised by HMRC for tax purposes. If the organisation has already been registered as a charity by the Charity Commission, this will usually be accepted as sufficient evidence for HMRC to consider it to be a charity for tax purposes.
The application is made on form ChA1 for recognition as a charity for tax.
Most of the income and gains received by charities are exempt from income tax and corporation tax provided that the assets representing such income / gains are used for charitable purposes only. For details of the main types of exemption and relief, see the Charities and tax page on the HMRC website.
There are some forms of income that do not qualify for tax relief. Two examples are:
trading income outside the exemptions (see below)
profits from developing land
For example, if a contract for the sale of land includes a provision for the charity to share in future profits from the development of that land, any such profits received will not be exempt. They will be chargeable under CTA 2010, s 356OB or ITA 2007, s 517B.
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
This guidance note explains how to calculate the amount of tax that arises under the lifetime charge. In general terms the lifetime charge will apply to individuals who transfer property into a trust that is subject to the relevant property regime. See the Chargeable transfers and Occasions of
Trust property, which is the subject of a qualifying interest in possession (QIIP), may become chargeable to inheritance tax on the following occasions:•on the death of the beneficiary with the interest in possession•on the death of the beneficiary within seven years after a transfer or lifetime
Investors’ relief is a capital gains tax (CGT) relief on the disposal of qualifying shares in an unlisted company. A taxpayer making a disposal that qualifies for investors’ relief will pay tax at a rate of 10%.Although it is a separate relief, the rules for investors’ relief were intended as an
Normal due dateIndividuals are required to pay any outstanding income tax, Class 2 and Class 4 national insurance and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2021 for the 2019/20 tax year). From 6 April 2020, UK resident individuals who