HMRC clarifies tax rules over buildings named after donors

There had been a question over whether it could be regarded as donor benefit

The Sainsbury Wing of the National Gallery (Photograph: In Pictures/Corbis/Getty Images)
The Sainsbury Wing of the National Gallery (Photograph: In Pictures/Corbis/Getty Images)

The government has clarified the tax rules that apply when buildings are named in honour of philanthropists, following pressure from charity experts.

HM Revenue & Customs has updated its guidance to make clear that if charities acknowledge donations with plaques or naming rights over a building, these donations will still normally be eligible for Gift Aid.

There had been a question over whether publicly acknowledging an individual in this way could be regarded as donor benefit for the purposes of tax rules.

The Charity Tax Group, which had raised the issue with officials, praised the government for responding “quickly and positively”.

The guidance now states that a “commemorative-type plaque recording the name of the individual donor and that they provided a donation” would not change the gift’s eligibility for tax relief.

The same rule will apply to buildings named after a donor, “as long as the naming does not act as an advertisement or sponsorship for a business”.

The CTG had raised concerns about the ambiguity of the previous guidance. Richard Bray, the group’s chair, said: “CTG is very grateful that, once the matter had been drawn to its attention, HMRC acted quickly and positively to clarify the situation.”

An HMRC spokesperson said: “We have improved the guidance to make it clearer when naming rights would not count as a donor benefit.”

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