From 15 March 2023, income tax relief is being withdrawn on donations made to EU or EEA charities and Community Amateur Sports Clubs (CASCs). This will mean that income tax relief will no longer be available to claim against taxable income on tax returns from this date. It will also affect inheritance tax relief for any gifts left in Wills.
There is a limited transitional relief, which allows for charities which have ‘asserted their UK charitable status’ to continue claiming relief until 5 April 2024, but thereafter unless they are a registered UK charity on the Charities Commission website, relief will not be allowed.
When preparing tax returns for our clients, we look at donations to consider whether gift aid has been claimed and what relief is available to both the taxpayer and charity. It will become even more important for us to ensure those charities are eligible for relief.
It should also be a good opportunity to review your Wills to ensure that they are up to date and ensure you are not making gifts to charities which are no longer eligible for relief. For example, if you are leaving 10% of your Estate to charity in order to reduce your inheritance tax liability from 40% to 36%, this reduction could be lost.
If you believe that you are making donations to EU or EEA charities or CASCs, our tax department will be happy to review and advise on the tax position.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.