Tax ruling 'will be ignored'

European court ruling on cross-border donations will be resisted by UK government, experts predict

The Government will fight a European Court of Justice ruling requiring it to provide tax relief on charitable donations made across national borders, tax experts have predicted.

The ruling, in the case of Hein Persche, a German donor who gave EUR18,000 (£16,000) to a Portuguese charity, suggested that any EU taxpayer donating to a foreign charity should receive the same tax relief as they would on a domestic donation.

David Hadley, a senior tax manager at accountancy firm Kingston Smith, said British tax authorities had a history of ignoring European rulings they did not agree with.

"I suspect they will say this is a German case and does not affect the UK," he said. "They will try to ignore it. I believe a lot of European governments will try to resist this definition."

Bill Lewis, a tax consultant with law firm Bates Wells & Braithwaite, said he thought the Government would have to accept the ruling, but not until it had been taken to court by a major donor in the UK.

A spokesman for HM Revenue & Customs said it was too early to comment on the judgement's potential impact on the UK.

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