In the Spring Budget of 2023, the government restricted charitable tax reliefs. The definitions of a charity and a Community Amateur Sports Club (CASC) for tax purposes have been changed so that only UK charities are eligible for charitable tax reliefs.
This change took effect from 15 March 2023, allowing for a transitional period which lasts until 5 April 2024 for individuals and 1 April 2024 for companies and charitable entities. After April 2024, taxpayers will not be eligible for UK tax relief on donations to EU or EEA charities.
The measure changed the definition of a charity by amending the jurisdiction condition and has changed the location condition for CASC, stating it must be based in the UK and provide facilities for eligible sports in the UK.
Individuals will need to assess their Will donations to EU and EEA charities to clarify whether their donations continue to qualify for UK Inheritance Tax relief under the new definition. You may wish to update your Will to leave those legacies to UK charities, allowing your beneficiaries to benefit from the reduced IHT rate of 36% (instead of 40%).