Charities – Substantial Donors
The threshold for what defines a substantial donor to any individual charity has increased from £100,000 to £150,000 over a period of six years. The annual threshold remains the same at £25,000.
These rules, which were introduced in 2006, are intended to protect charitable reliefs from abuse. The main thrust of these rules is to restrict the dealings a charity can have with a substantial donor without the charity’s ability to recover Gift Aid tax relief being affected; this includes certain property transactions and investments by the charity in the business of a substantial donor.
The increase in the six year limit has been put in place to reduce the administrative burden on charities who receive between £100,000 an £150,000 from donors over a six year period.
The new limits are effective from 23 April 2009.