Major changes expected for substantial donor legislation

Head of Charity Tax Group predicts overhaul of the law after Budget announcement

Proposals in the Budget for substantial donor legislation indicate that the Government is likely to make significant changes to the current laws, according to the the head of the Charity Tax Group.

The legislation, which imposes strict rules regarding charities' relationships with wealthy individual donors, will remain in place following this year's Budget.

But the Government has promised charities it will launch a new "informal consultation" into the laws. It has said it will introduce proposals based on the consultation in the 2009 Pre-Budget Report, and intends to introduce new legislation in 2010.

Helen Donoghue, director of the Charity Tax Group, who has campaigned for the law to be repealed, said she was confident that major changes would be made to the rules by the next Budget.

"Without a shadow of a doubt, I believe they intend to make very wide changes to the current laws," she said. "They intend to make them work effectively with the needs of individual charities.

 "This represents an opportunity for the sector to work with HM Revenue & Customs to develop a robust test that covers all areas of anti-avoidance legislation."

The Budget also raised the amount a donor has to give over a six-year period to be considered a substantial donor from £100,000 to £150,000.

David Ainsworth recommends

Charity Tax Group

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