What did section 12 of the Small Charitable Donations Act 2012 originally do?

Section 12 allowed a newly formed charity that took over the activities of an existing charity to inherit the predecessor charity's Gift Aid claim history. This ensured that a straightforward charity merger would not result in loss of eligibility for the Gift Aid Small Donations Scheme due to the new charity lacking its own track record.

Why was section 12 of the Small Charitable Donations Act 2012 repealed?

Section 12 was repealed by the Small Charitable Donations and Childcare Payments Act 2017 because the 2017 reforms removed the requirement for charities to demonstrate a multi-year track record of Gift Aid claims. Without that eligibility hurdle, special rules for inheriting a predecessor charity's claim history following a merger were no longer necessary.

How do newly merged charities now qualify for the Gift Aid Small Donations Scheme after the repeal of section 12?

From the 2017-18 tax year onwards, newly merged charities can qualify for the Gift Aid Small Donations Scheme in their own right. They simply need to have made a successful Gift Aid claim in the same tax year and not have incurred an HMRC penalty in connection with a Gift Aid or Small Donations Scheme claim.

What type of charity merger did section 12 of the Small Charitable Donations Act 2012 cover?

Section 12 specifically covered straightforward merger scenarios where a new charity was established to take over the activities of one existing charity. It addressed the practical problem that the new charity would have no Gift Aid claim history in its own name, despite carrying on exactly the same charitable work as its predecessor.

Small Charitable Donations Act 2012 section 12

Charity mergers: new charity taking over activities of one charity

Section 12 dealt with charity mergers where a new charity took over the activities of an existing charity, and how this affected eligibility for Gift Aid Small Donations Scheme top-up payments.

Section 12 originally set out rules for how a newly formed charity could inherit the track record of a predecessor charity for the purposes of the Small Donations Scheme.
This was relevant where a new charity was established specifically to take over the activities of one existing charity — a straightforward merger scenario.
The section has been repealed in its entirety by the Small Charitable Donations and Childcare Payments Act 2017.
The repeal reflects the 2017 reforms which removed the previous eligibility requirements, including the requirement for charities to have a certain number of years' track record of Gift Aid claims before qualifying for the scheme.

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