I am advised by Revenue that there are a number of provisions in the Taxes Consolidation Act (TCA) 1997 and the Capital Acquisitions Consolidation Act 2003 that provide for tax relief in respect of philanthropy.
Section 848A and Schedule 26A of the TCA provide for a scheme of tax relief for donations to approved bodies, including eligible charities. As the Deputy may be aware, changes were made to that scheme in Finance Act 2013. Individual donors no longer benefit from the tax relief associated with their donations; the relief is repaid direct to the charity. A blended rate of relief of 31% applies to all tax-payers regardless of their marginal tax rate. Donations are “re-grossed” i.e. the sum donated is treated as a net amount after deduction of tax and the gross sum that would give rise to that net amount is calculated. Relief in the amount of the imputed tax payable on the gross sum is repaid to the charity. There is an annual donation limit of €1 million per individual for which a refund of income tax can be claimed by approved bodies.
Section 847A of the TCA provides tax relief for relevant donations to approved sports bodies
for the funding of approved projects. An approved sports body means a body established for the sole purpose of promoting athletic or amateur games or sports and whose income is exempt from tax where it is applied solely for those purposes. An approved project is a project as specified in the section which has been approved by the relevant Minister. Under this scheme a self–assessed individual
is entitled to claim a deduction in respect of a donation made to an approved sports body in calculating his or her total income. Where a PAYE-only taxpayer makes a relevant donation to an approved sports body, the body is deemed to have received the payment net of income tax and is entitled to claim a refund of the income tax deducted after the donation has been re-grossed at the donor’s marginal rate.
When a company makes a qualifying donation to an approved body, including an eligible charity or an approved sports body, it can claim a deduction for the donation as if it were a trading expense or an expense of management for the accounting period in which it is paid.
I am further advised by Revenue that there is provision in section 1003 of the TCA 1997 for the payment of tax by the donation of heritage items to Irish national collection. A credit equal to 80% of the market value of the item donated can be set against taxpayers’ liabilities for certain taxes.
The heritage item(s) must be an outstanding example of the type of item involved, pre-eminent in its class, whose export from the State would constitute a diminution of Ireland’s accumulated cultural heritage or whose import into the State would constitute a significant enhancement of the accumulated cultural heritage of Ireland and must be suitable for acquisition by the Approved Bodies which include the National Archives, National Gallery, National Library and National Museum. The determination as to whether an item is a suitable heritage item under the scheme is carried out by a selection committee of experts, and is subject to valuation limits.
Section 1003A of the TCA provides that tax relief is available in respect of the donation of heritage property to the Irish Heritage Trust or the Commissioners of Public Works in Ireland, subject to provisions that the property is a suitable heritage property, for example that it is of significant historical or scientific value. The scheme takes the form of a non-refundable payment on account of tax of an amount equal to 50 per cent of the market value of the heritage property donated and can be credited against particular tax liabilities incurred by the donor. There is a ceiling of €6 million on the aggregate value of heritage properties that may be approved for donation in any one year.
Section 611 of the TCA provides that where an asset is disposed of for no consideration to the State to a charity or to other specified bodies such as the National Archives, the National Gallery, the National Library or the National Museum, the disposal is treated as not giving rise to either a gain or a loss for capital gains tax purposes.
Section 76 of the Capital Acquisitions Tax Consolidation Act 2003 provides that where a gift or an inheritance is taken for public or charitable purposes the beneficiary is exempt from both gift tax and inheritance tax and the gift or inheritance is not taken into account when computing tax to the extent that Revenue is satisfied that it has been, or will be, applied for purposes which in accordance with the laws of the State are public or charitable.
