The definition of “charity” for tax purposes has been restricted to charities within the jurisdiction of the High Court in England, Wales or Northern Ireland, or the Court of Session in Scotland. Charities located in the EU or the EEA that have not already been recognised by HMRC as “charities” for UK tax purposes can no longer qualify for UK charitable tax reliefs.
HMRC has been reluctant to recognise non-UK charities as charitable for tax purposes and now cross border philanthropy will be even less encouraged. Apparently there are only approximately 20 EU/EEA charities that have “asserted their charitable status” with HMRC and are claiming UK tax relief. They will lose this status from April 2024 unless they can establish a UK presence.
This is significant for any taxpayers donating to EU or EEA charities which were previously eligible for UK tax relief. It will also affect anyone who has a Will in place leaving a charitable legacy to an EU/EEA charity in the expectation that this would qualify for the UK Inheritance Tax exemption.