Tax relief on Charitable Donations

Edit: The rules were changed in 2013 - the new rules are in this thread:

Tax relief on donations to charity




From: Revenue Guide

WHAT DONATIONS QUALIFY FOR RELIEF?
The minimum donation in any single year that must be made to any one eligible charity must be of a
value of £250.

Cash donations made in instalments (e.g. Standing Order) also qualify.

There is no maximum qualifying donation amount save that where there is an association between the donor and the eligible charity/approved body at the time the donation is made, e.g. where the donor is an employee or member of the eligible charity/approved body, the relief will be restricted to 10% of the total income of the individual for the relevant year of assessment.

A donation must also satisfy the following conditions:
It must be in the form of money or designated securities or a combination of money and designated securities,
It must not be repayable,
It must not confer any benefit on the donor or any person connected with the donor,
It must not be conditional on, or associated with, any arrangement involving the acquisition of property by the eligible charity or the approved body.

How to claim
For a PAYE-only taxpayer, the relief will be given on a “grossed up” basis to the eligible charity rather than by way of a separate claim to tax relief by the donor. In other words, the donation will be treated as having been received by the eligible charity or approved body ‘net’ of income tax. In the case of a donation made by an individual who pays tax on a Self-Assessment basis, the individual will claim the relief and there is no grossing up arrangement.

Similarly, in the case of a donation made by an individual who pays portion of his/her tax under the Self-assessment system
but who also pays tax under the PAYE tax system, the individual will claim the relief and there is no grossing up arrangement unless he is not deemed a "chargeable person" for self-assessment purposes.

The individual PAYE-only donor must complete an “Appropriate Certificate” - see Appendix 2 'CHY2 Cert' -
and forward it to the relevant eligible charity to allow it to claim the
grossed up amount of tax associated with the donation.

The minimum donation in any single year that must be made to any one eligible charity must be of a
value of £250.

Click to expand...

So if I am a PAYE person, I must donate €250 and the charity will get €423

But if I am self-employed, I can donate €250 gross.

FAQ

How do I know if the charity is an eligible charity?
It is not enough for a charity to be a registered charity. It must also be eligible for this scheme. Not all charities are eligible. You can find the list [broken link removed].

Does it only include charities?
No, schools may also apply for the scheme.

Can I get a tax deduction for my kid's school fees?
No. It is a condition of the scheme, that you get no benefit from the donation.

Can I get tax relief for my kid's university fees?
Not under this scheme. But you can get tax relief at the standard rate under a separate scheme

I own a company. Can I get tax relief?
Yes, it's even more tax efficient to pay through a limited company which you own. A payment of €1,000 will be allowed in full against taxable profits. If you had paid the €1,000 to yourself as salary it would have cost up to 9% in prsi and levies.

Are there any limits on the amount I can donate?
Not generally. But if you are an employee or a board member of the charity, the amount of the donation which qualifies for tax relief is limited to 10% of your salary.

If you earn over €250,000 a year, the total reliefs you can claim against your income is limited to 50% of your gross income.

Can I donate land or property?
There is no tax relief available on donations of property. Sell the property first and donate the proceeds.

What if I have both self-employed and PAYE income
You must claim it against your self-employed income

The tax rules have been changed for donations from 1 Jan 2013.

The charity now reclaims the tax directly and the donor does not make a claim.

There is a good summary here

http://www.ictr.ie/node/17

I am aware of the tax situation on charitable donations but I was always puzzled as to whether the regular mass collection taken up in Catholic Churches are entitled to benefit from this tax rule. In my parish the priest sends out the form for signature and your PPSN so they are obviously claiming it.
On a personal note I have received the form for several years with an amount of around €300 being put on it as my contribution to the collection over the course of the year. I am not a regular churchgoer and it would have been about half of of this. I did not bother returning it but as you can see it is open to abuse from the contribution amount point of view.