What is a connected charity under Corporation Tax Act 2010 section 939G?

Under section 939G, a connected charity is one that has a connection with another charity in a matter relating to the structure, administration or control of either charity. This includes charities sharing trustees or where one charity's governing documents give the other influence over its affairs.

Why does the Corporation Tax Act 2010 define connected charities?

The definition prevents donors from circumventing the tainted charity donations provisions under Part 21C by splitting donations across multiple linked charities. By defining connected charities, the legislation ensures that donations to related charities can be examined together under the tainted donations tests.

How does the connected charity definition apply to the tainted donations rules?

When assessing whether a donation is tainted, you must consider not only the receiving charity but also any connected charities. If donations are made to charities connected with one another as part of an arrangement, those donations can be examined together under the tainted donations tests in Part 21C.

Can two charities sharing the same trustees be connected charities under section 939G?

Yes. Two charities that share the same board of trustees and operate under a common administrative framework would be regarded as connected charities under section 939G. Their shared governance and administration creates a connection relating to structure, administration or control of either charity.

Corporation Tax Act 2010 section 939G

Connected charities

Section 939G defines what a "connected charity" means for the purposes of the tainted charity donations rules in Part 21C of the Act.

A "connected charity" is one that has a connection with another charity in matters relating to structure, administration or control.
The connection can relate to either charity — it does not matter which one's structure, administration or control creates the link.
This definition is used in the tests for tainted donations, so that arrangements involving multiple donations to connected charities are caught by the rules.
The definition ensures that donors cannot circumvent the tainted donations provisions simply by splitting donations across charities that are linked to one another.

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