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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am involved with a charitable acting group called BOATE

Customer Question

Hi, I am involved with a charitable acting group called BOATE who are raising funds for the Action Duchenne charity. The reason for BOATE is that the MD, has a son called Nicholas who has Muscular Dystrophy and we all hope to help the AD charity to find a cure for him. Our Company rules state we will make a payment of 10% of our profits every year directly to Action Duchenne.
At a recent meeting it was agreed we would all like to change the constitution of BOATE to enable some of our accumulated profits to benefit Hugh and the family directly rather than just making a yearly payment to Action Duchenne. I was asked to look into making BOATE a charity or any other method that would enable us to pass funds directly to Hugh and the family. We are a Company Limited by Guarantee and our articles have been lodged with Companies House.
I have been told that we can make a "present" to Hugh every year of up to £30,000 without incurring a tax liability. So, here is my question: Is it possible (although the amount will be more like £3,000 per annum) to make this payment to Hugh and for him to receive it on behalf of his Son and incur no liability for tax on this amount?
I would be grateful for your advice please.
***** *****
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Here is the Gov UK guidance on this matter: 'Claim relief in the Company Tax Return that covers the accounting period during which you made the donation or sale if you have:donated moneygiven or sold land, property or sharesEnter the total value of your donations in the ‘Interest payable and similar charges’ box of the ‘Profit and loss’ section of your tax return.' You can read the full gamut of the advice here: https://www.gov.uk/tax-limited-company-gives-to-charity/how-to-claim I do hope that my reply has been of assistance.
Customer: replied 2 years ago.
Thanks Keith but you haven't answered my main questions. 1) Are we able to pass funds to Hugh and his family without causing us a problem and 2) Is he able to receive these funds without incurring a tax liability. He is not a registered charity!Steve
Customer: replied 2 years ago.
PS Hugh is self-employed
Expert:  bigduckontax replied 2 years ago.
Providing the Company's Memorandum of Association permits such payments then funds may be passed to Hugh. Yes he is, if they are a donation. The Company should say so on each and every occasion a payment is made.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.