New Tax measures affecting charities

New Tax measures affecting charities – March Budget 2011

Gift Aid

2.112 Gift Aid benefit limits – The Gift Aid benefit limit will be increased from £500 to £2,500, subject to the existing 5 per cent limit, from April 2011. New guidance will be published to help clarify what constitutes a benefit. (Finance Bill 2011)

2.113 Gift Aid small donations scheme – From April 2013, the Government will introduce a new scheme to allow charities to claim Gift Aid on up to £5,000 of small donations without the need for Gift Aid declarations. (51)

2.114 Gift Aid online filing – The Government confirms that it will introduce an online system for charities to claim Gift Aid and as a first step will shortly be publishing ‘intelligent’ forms (which contain automatic checks) for charities to use to apply for and claim tax reliefs. Budget 2011 61

2.115 Self Assessment (SA) Donate – To help fund the introduction of Gift Aid online filing, the Government will withdraw SA Donate for tax returns for 2011-12 onwards. (Finance Bill 2012)

Other tax measures affecting charities

2.116 Inheritance tax: reduced rate for charitable donations – From 6 April 2012, the Government will introduce a reduced rate of inheritance tax of 36 per cent for estates leaving 10 per cent or more to charity. (Finance Bill 2012) (50)

2.117 Gifts of works of art – The Government will consult in 2011 on proposals to encourage donations of pre-eminent works of art or historical objects to the nation in return for a tax reduction.

2.118 In-year repayments on tax to charities – The Government will legislate an extra statutory concession under which HMRC makes repayments of tax to certain charities without requiring a tax return to be completed. (Finance Bill 2012)

2.119 Changes to the substantial donors rules – In December 2010, the Government published draft clauses to replace the substantial donors to charities legislation. This anti avoidance legislation denies relief where the donor enters into arrangements with the main purpose of obtaining a financial advantage from the charity. The new rules will commence from April 2011. (Finance Bill 2011)

the complete Budget report can be found here: http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf

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