Julien Pritchard focuses on the charity announcements made in the 2014 budget.This month I would like to take a look at the impact the recent budget has had on our increasing charitable client base. The key highlights of the charity-specific provisions from the budget are as follows:
- Cathedral Repairs – £20 million has been earmarked by the Government for a grant scheme for repairs to cathedrals.
- Air ambulance and inland safety boat charities – A 5-year grant of £65,000 is being provided per year for air ambulance charities across the UK. Further there is also being introduced a 5-year grant of £1 million per year for inland safety boat charities across the UK. A new air ambulance for London is also in the works.
- Cultural Gifts Scheme limits go up – The Cultural Gifts Scheme combined annual limit and Inheritance Tax Acceptance in Lieu scheme will be increased from £30 million to £40 million a year from 2014-15.
- Charity donor benefits – The government has promised a review of the benefits allowed to donors in an attempt to simplifying existing rules. This could make the application of gift aid an easier process.
- Tax relief for theatres – A new 25% theatre tax relief for qualifying touring productions and 20% for other qualifying productions comes into effect from 1 September 2014.
Following on from the Autumn Statement 2013, the following items announced also remain of interest to charitable entities:
- Gift Aid – Legislation has been promised to allow non-charity intermediaries a greater role in operating Gift Aid.
- Small charities – This government wishes to increase the take up of gift aid with a view to encouraging more donors to use Gift Aid and also to persuade smaller charities to claim the reliefs to which they are entitled.
- Amendments to Cultural Gifts Scheme legislation – Legislation will come in to make sure the Cultural Gifts Scheme (CGS) works as envisaged in relation to Estate Duty. The amendment will ensure that donors of objects, on which there is potentially a charge to Estate Duty, are not financially better off by donating the object under the CGS, than selling the object on the open market.
- Community Amateur Sports Clubs – Tax relief on gifts of cash from companies to Community Amateur Sports Clubs will be allowed.
- Stamp duty land tax (SDLT): charities relief – The regulations will be amended to clarify that partial relief from SDLT is available where a charity purchases property jointly with a non-charity. The charitable entity will be able to claim relief on the part of the purchase attributable to them.
- Avoidance schemes – Clear message have been sent form the government that avoidance schemes will not be tolerated. Further consultation is occurring on measures to deter the use of charities established for the purpose of tax avoidance.
We work closely with a number of tax specialists, if you have any tax queries relating to this or any topic we would be happy to put you in touch with the best person to fulfil your requirements.
For more information or to discuss these issues please contact us.
This article was written by Julien Pritchard, a Partner and Head of our Company and Commercial Team. This article is only intended to provide a general summary and does not constitute legal advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at March 2014.