HMRC loses charity appeal
Revenue loses 'cash is not an asset' battle over relationship between trading companies and charitable parents
A charity denied tax relief for gift aid payments from its trading company
has won its case at the Special Commissioners.
The case, which relates to the Noved Investment Company owned by the Foyle
foundation, turned on whether or not Noved could distribute its profits to its
charitable parent and avoid paying corporation tax on them.
The Special Commisioners ruled today that it could, turning down a series of
challenges from HMRC on the issue. One challenge was the bizarre suggestion that
for various technical reasons, cash did not constitute an asset, trailed on
HMRC’s website late last year.
Advisers have said the case appeared to suggest a broader attack on the
structure of tax relief for charities as a whole.
AccountancyAge.com will have more details soon.