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Overseas donations
KEY POINTS
- Charities may claim a tax exemption on funds used for charitable purposes.
- Trustees must undertake due diligence on overseas bodies to which it sends donations.
- HMRC guidance provides some assistance on this.
- A third party could be used to ensure donations are used for the purpose intended but the trustees have ultimate responsibility.
- Alternative dispute resolution might be useful if a dispute arises with HMRC.
It is often assumed the taxation of charities is straightforward – the organisation applies its funds for charitable purposes and no tax is payable to HMRC. If only it were that simple. Indeed charities can claim exemption from tax on most forms of income and capital gains if these are applied for charitable purposes – those regarded as charitable within the Charities Act....
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