Small Charitable Donations Act 2012 section 5

Meaning of "connected"

Section 5 defines when two charities are treated as "connected" with each other for the purposes of the Small Charitable Donations Act, which is important because connected charities must share the overall cap on top-up payments between them.

• Two charities are connected in a tax year if they are connected at any point during that year, but only if their purposes and activities are the same or substantially similar.
• The connection test is transitive: if Charity A is connected to Charity B, and Charity B is connected to Charity C, then Charity A and Charity C are also connected.
• Whether charities are connected is determined by applying the general "connected persons" rules from section 993 of the Income Tax Act 2007, with special modifications to cover charities structured as trusts.
• The Treasury has the power to change, by order, the circumstances in which charities are treated as connected.