Small Charitable Donations Bill (HL Bill 58)

first cease to be an eligible charity, assuming that none of them were to
make a successful gift aid exemption claim in the year of the merger or
any later tax year;

(b) if only one of the old charities was not an eligible charity for the year of
5the merger, the relevant old charity is that charity;

(c) if more than one of the old charities was not an eligible charity for the
year of the merger, the relevant old charity is whichever of those
charities would last become an eligible charity, assuming that each of
them were to make a successful gift aid exemption claim in the year of
10the merger and every later tax year;

(d) if two or more old charities would otherwise be the relevant old charity
under paragraph (a) or (c), the new charity must elect which of those
charities is the relevant old charity.

(5) In deciding whether to issue a certificate under this section, HMRC must have
15regard in particular to the extent to which the property of the old charities has
been transferred to the new charity.

(6) HMRC must issue such guidance as they consider appropriate about the
exercise of their functions under this section.

(7) Regulations under section 11 may in particular make provision—

(a) 20about the form and contents of applications under this section;

(b) imposing a time limit for the making of an application;

(c) for an application to require the consent of each old charity that is in
existence at the time of the application;

(d) about elections under subsection (4)(d);

(e) 25for appeals against a refusal to issue a certificate under this section.

(8) In this section—

• “managers” means the persons having the general control and
  management of the administration of a charity;

• “old charity manager” means a person who was a manager of an old
  30charity immediately before the last of the activities of the old charity
  were transferred to the new charity;

• “time of the merger” means the time when the new charity took over the
  activities of the old charities (or, if that occurred over a period of time,
  the end of that period);

• 35“year of the merger” means the tax year in which the time of the merger
  fell.

14 Power to alter specified amount etc

(1) The Treasury may by order amend—

(a) section 1(6) (the specified amount),

(b) 40section 4(3)(a),

(c) section 6(3)(b) and (4)(b), and

(d) section 9(4)(b),

by substituting a different sum for the sum for the time being specified in each
of those provisions.

(2) 45The Treasury may by order amend this Act for the purpose of—

(a) amending the gift aid matching rule;

(b) abolishing that rule;

(c) reinstating that rule (if previously abolished), with or without
amendment.

(3) In subsection (2) “the gift aid matching rule” means the rule that limits the
5amount of top-up payments to which a charity is entitled by reference to the
amount of gifts made to the charity in respect of which it has made successful
gift aid exemption claims.

(4) The Treasury may by order amend section 2 (meaning of “eligible charity”).

(5) Section 2, as amended by an order under subsection (4), must as a minimum
10include a condition requiring the making of a successful gift aid exemption
claim in a previous tax year.

(6) The Treasury may by order amend paragraph 1(1) and (2) of the Schedule
(limit on value of individual donations) by substituting a different sum for the
sum for the time being specified in each of those provisions.

15 15Top-up payments not taxable

A top-up payment is not to be treated as income for any purpose of the Tax
Acts.

General

16 Northern Ireland

20In Schedule 2 to the Northern Ireland Act 1998 (excepted matters), before
paragraph 10 insert—

“9C The operation of the Small Charitable Donations Act 2012.”

17 Regulations and orders

(1) Regulations and orders under this Act are to be made by statutory instrument.

(2) 25A statutory instrument containing regulations or an order under the preceding
provisions of this Act may not be made unless a draft of the instrument has
been laid before and approved by a resolution of the House of Commons.

(3) Regulations and orders under this Act—

(a) may apply generally or only in specified cases or circumstances;

(b) 30may make different provision for different cases or circumstances;

(c) may make consequential, supplementary, incidental, transitional or
saving provision.

18 General interpretation

(1) In this Act “charity” means—

(a) 35a charity within the meaning of Part 1 of Schedule 6 to the Finance Act
2010;

(b) the Trustees of the National Heritage Memorial Fund;

(c) the Historic Buildings and Monuments Commission for England;

(d) a registered club within the meaning of Chapter 9 of Part 13 of the
Corporation Tax Act 2010 (community amateur sports clubs).

(2) In this Act—

• “charitable activity” has the meaning given by section 7;

• 5“charitable purpose”—

  (a)

  in the case of a charity within subsection (1)(a) to (c), has the
  meaning given by section 2(1) of the Charities Act 2011 (reading
  the reference in section 2(1) to the law of England and Wales as
  including a reference to the law of Scotland and the law of
  10Northern Ireland);

  (b)

  in the case of a charity within subsection (1)(d), means
  qualifying purpose within the meaning given by section 661(3)
  of the Corporation Tax Act 2010;

• “community building” is to be read in accordance with section 8;

• 15“connected charities”: references to a charity being connected with
  another charity in a tax year are to be read in accordance with section 5;

• “eligible charity” is to be read in accordance with section 2;

• “gift aid exemption claim” means a claim for amounts to be exempt from
  income tax or corporation tax by virtue of—

  (a)

  20section 521(4) of the Income Tax Act 2007, or

  (b)

  section 472, 475 or 664 of the Corporation Tax Act 2010,

  (and for related expressions see subsection (3) below);

• “HMRC” means the Commissioners for Her Majesty’s Revenue and
  Customs;

• 25“running charitable activities in a community building”: references to a
  charity running charitable activities in a community building in a tax
  year are to be read in accordance with section 7;

• “small donation” is to be read in accordance with section 3;

• “tax year” means a year beginning on 6 April and ending on the following
  305 April;

• “top-up claim” means a claim under section 1 (and for related expressions
  see subsection (3) below);

• “top-up payment” has the meaning given by section 1.

(3) For the purposes of this Act—

(a) 35a gift aid exemption claim is “successful” if an amount falls to be
exempt from income tax or corporation tax as a result of the claim;

(b) a successful gift aid exemption claim is made in respect of a gift to the
extent that the gift, or the grossed up amount of the gift, falls to be
exempt from income tax or corporation tax as a result of the claim;

(c) 40a successful top-up claim is made in respect of small donations if, and
to the extent that, a top-up payment falls to be made because of the
claim (and does not fall to be repaid under section 10);

(d) in determining whether a successful claim has been made in a tax year,
it does not matter when the claim is determined.

(4) 45In this Act a reference to the making of a claim by a charity includes a reference
to the making of a claim on behalf of the charity.

19 Financial provisions

There is to be paid out of money provided by Parliament any increase
attributable to this Act in the sums payable under any other Act out of money
so provided.

20 5Extent

This Act extends to—

(a) England and Wales,

(b) Scotland, and

(c) Northern Ireland.

21 10Commencement and transitional provision

(1) This Act comes into force on 6 April 2013, subject to subsections (2) and (3).

(2) Any provision of this Act that confers a power to make regulations or an order
comes into force, for the purposes of the use of the power, on the day on which
this Act is passed.

(3) 15The following provisions of this Act come into force on that day—

(a) sections 16 to 20;

(b) this section;

(c) section 22.

(4) In section 2 the references to claims having been made, or penalties having
20been imposed, include claims made, or penalties imposed, before the date on
which that section comes into force.

(5) In applying section 2 by virtue of subsection (4)—

(a) the reference in section 2(4)(b) to Schedule 24 to the Finance Act 2007
includes a reference to any enactment omitted by paragraph 29 of that
25Schedule;

(b) any reference in the definition of “gift aid exemption claim” in section
18(2) to a provision of the Income Tax Act 2007 or the Corporation Tax
Act 2010 includes a reference to any corresponding earlier enactment
rewritten in that provision.

(6) 30The Treasury may by order make other transitional provision in connection
with the coming into force of any provision of this Act.

22 Short title

This Act may be cited as the Small Charitable Donations Act 2012.

Section 3

Schedule Meaning of “small donation”: conditions

Small cash payment

1 (1) The gift must be £20 or less in cash.

(2) 5Where a gift of cash is made to the charity and its managers do not know
whether the gift is £20 or less, the condition in sub-paragraph (1) is to be
treated as met if the managers have taken reasonable steps to find out.

(3) In this paragraph—

• “cash” means coins and notes in any currency;

• 10“managers”, in relation to a charity, means the persons having the
  general control and management of the administration of the charity.

Collected in the United Kingdom

2 The gift must be received in the United Kingdom by or on behalf of the
charity.

15Deposited in United Kingdom in a bank account

3 (1) The cash given to the charity must have been deposited in an account kept
by or on behalf of the charity at a relevant institution and the deposit must
have been made in the United Kingdom.

(2) “Relevant institution” has the meaning given by section 109(3) of the
20Charities Act 2011.

Not eligible for gift aid

4 (1) The gift must be one in relation to which no gift aid declaration is given to
the charity.

(2) “Gift aid declaration” means a declaration which is a gift aid declaration for
25the purposes of Chapter 2 of Part 8 of the Income Tax Act 2007.

Not payment under payroll deduction scheme

5 The gift must not be a sum falling within section 713(3) of the Income Tax
(Earnings and Pensions) Act 2003 (payroll deduction scheme).

Not deductible in calculating income

6 30The gift must not be deductible in calculating the individual’s income from
any source for the purposes of income tax.

Not subject to condition as to repayment

7 The gift must not be subject to any condition as to repayment.

Not conditional on acquisition of property by charity

8 (1) The gift must not be conditional on, associated with or part of an
5arrangement involving, the acquisition of property by the charity from the
individual or a person connected with the individual.

(2) An acquisition by way of gift is to be ignored for the purposes of this
condition.

No, or only negligible, benefits associated with gift

9 (1) 10There must be no benefits associated with the gift, or any benefits associated
with the gift must be of negligible value (for example, a lapel sticker
designed to acknowledge the making of a gift).

(2) For this purpose a benefit is associated with a gift if it is received by the
individual who makes the gift, or a person connected with the individual, in
15consequence of making the gift.

Interpretation

10 For the purposes of this Schedule whether a person is connected with
another person is to be determined in accordance with section 993 of the
Income Tax Act 2007.