How does the Small Charitable Donations Act 2012 determine whether persons are connected?

Schedule paragraph 10 does not create its own definition. Instead, it directs you to section 993 of the Income Tax Act 2007, a well-established provision used across UK tax law. That section treats persons as connected through family relationships, business partnerships, trustee arrangements, and company control relationships, including associates of those persons.

Why does the concept of connected persons matter for community building top-up payments?

Where two charities share trustees, controllers, or other connected individuals, the Schedule treats them as linked. This can limit the total gift aid style top-up payments available across the connected group, preventing charities from splitting activities across multiple entities to multiply the amounts that can be claimed.

What types of relationships create connected person status under section 993 of the Income Tax Act 2007?

Section 993 treats persons as connected if they are related by family ties such as spouses, civil partners, siblings, ancestors, or lineal descendants. Connections also arise through business partnerships, trustee and settlor arrangements, and where a person controls a company or two companies share the same controller. Associates of these persons are also included.

Can two charities sharing a common trustee be treated as connected persons?

Yes. If an individual serves as a trustee of both charities, section 993 of the Income Tax Act 2007 treats those charities as connected persons. The connected persons rules in the Schedule will then apply when calculating top-up payments for small donations collected at their respective community buildings, potentially restricting the total claimable amount.

Small Charitable Donations Act 2012 Schedule paragraph 10

Determining whether persons are connected

Schedule paragraph 10 explains how to determine whether two persons are "connected" for the purposes of the community buildings rules in the Schedule.

The concept of "connected persons" is relevant to several rules in the Schedule governing eligibility for community building top-up payments.
Rather than creating a new definition, the paragraph adopts the existing meaning of "connected persons" from section 993 of the Income Tax Act 2007.
Under that provision, connections arise through family relationships, business partnerships, trustee arrangements, and relationships between companies and their controllers.
Charities sharing connected persons — such as common trustees or controllers — may face restrictions on the amounts they can claim under the community buildings rules.

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