HMRC has updated its detailed guidance on charities in relation to direct taxation arrangements between charities and their trading subsidiary companies. The guidance makes it clear that any donation payment made by a subsidiary company to its parent charity which exceeds the subsidiary’s profits available for distribution is unlawful under the Companies Act 2006. No tax deduction will be given for unlawful distributions for accounting periods commencing on or after 1 April 2015. See www.bit.ly/1bRX81V Annex iv.
HMRC has updated its detailed guidance on charities in relation to direct taxation arrangements between charities and their trading subsidiary companies. The guidance makes it clear that any donation payment made by a subsidiary company to its parent charity which exceeds the subsidiary’s profits available for distribution is unlawful under the Companies Act 2006. No tax deduction will be given for unlawful distributions for accounting periods commencing on or after 1 April 2015. See www.bit.ly/1bRX81V Annex iv.
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