{"id":5944,"date":"2026-08-04T11:00:38","date_gmt":"2026-08-04T10:00:38","guid":{"rendered":"https:\/\/www.tayloremmet.co.uk\/blogs\/?p=5944"},"modified":"2026-07-23T15:50:08","modified_gmt":"2026-07-23T14:50:08","slug":"charity-tax-relief-finance-act-2026","status":"publish","type":"post","link":"https:\/\/www.tayloremmet.co.uk\/blogs\/charity-tax-relief-finance-act-2026\/","title":{"rendered":"Finance Act 2026 Briefing Note: Amendments to the Charity Tax Relief Regime"},"content":{"rendered":"<h4><span data-contrast=\"none\">The Finance Act 2026 dealing with amendments affecting charity tax relief took effect on 6 April 2026 and\u00a0form\u00a0part of a wider package of measures intended to strengthen compliance and\u00a0maintain\u00a0confidence in the proper operation of charitable tax reliefs.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/h4>\n<p><span data-contrast=\"none\">While many charities will not notice an immediate impact on their day-to-day operations, the reforms place greater emphasis on governance, record keeping and\u00a0demonstrating\u00a0that charitable funds and investments are being used for genuine charitable purposes. Trustees and finance teams should ensure\u00a0appropriate procedures\u00a0are in place to evidence compliance with the revised rules.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The principal amendments concern four aspects of the charity tax regime: approved charitable investments, attributable income, tainted donations, and sanctions for failure to meet tax obligations.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<h2>Approved charitable investments<\/h2>\n<p><span data-contrast=\"none\">The Act extends the requirement that an investment must be made for the benefit of the charity, and not for the avoidance of tax, across all 12 categories of approved charitable investments. An investment must now satisfy the statutory \u201callowable purpose\u201d test, namely that it is reasonable to conclude, having regard to all the circumstances, that the investment is made for the sole purpose of benefiting the charitable trust or for that purpose together with ancillary or incidental purposes, and is not made for the avoidance of tax.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<h2>Attributable income<\/h2>\n<p><span data-contrast=\"none\">The Act brings legacies received by charities and Community Amateur Sports Clubs (CASCs) within the\u00a0attributable\u00a0income provisions. In practical terms, a\u00a0legacy gifts\u00a0made by will are\u00a0<\/span><span data-contrast=\"none\">treated as taxable income. However, they\u00a0remain\u00a0exempt to the extent they are applied solely for charitable purposes.\u00a0<\/span><span data-contrast=\"none\">The amendments therefore place particular emphasis on evidencing the application of legacy assets and funds\u00a0to\u00a0charitable purposes.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<h2>Tainted donations<\/h2>\n<p><span data-contrast=\"none\">The Act amends the tainted charity donation provisions so that the analysis is no longer confined to the donor\u2019s\u00a0purpose, but\u00a0extends to the outcome of the arrangements in question. It also replaces the\u00a0previous\u00a0\u201cfinancial advantage\u201d formulation with a broader concept of \u201cfinancial assistance\u201d.\u00a0A donation may accordingly be treated as tainted where a linked person who is not a charity receives financial\u00a0assistance, directly or indirectly, from the recipient charity or a connected charity under or in connection with the relevant arrangements.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<h2>Sanctions for failure to meet tax obligations<\/h2>\n<p><span data-contrast=\"none\">The reforms also contemplate sanctions for charities and Community Amateur Sports Clubs (CASCs) that\u00a0fail to\u00a0meet their tax obligations. As set out in HMRC\u2019s policy papers, the\u00a0objective\u00a0is to strengthen HMRC\u2019s ability to secure compliance among the minority of\u00a0organisations\u00a0that persistently\u00a0fail to\u00a0comply with\u00a0filing and payment requirements while continuing to claim charitable tax reliefs. At the time of writing, this aspect of the regime is principally addressed in policy and guidance material rather than detailed statutory provisions, and further HMRC guidance is expected.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<h2>How we can\u00a0assist<\/h2>\n<p><span data-contrast=\"none\">Taylor Emmet Solicitors\u2019 Charity Assist Team\u00a0<\/span><span data-contrast=\"none\">Expert legal guidance to help your charity grow,\u00a0manage\u00a0and protect legacy income.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">For more information contact our<a href=\"https:\/\/www.tayloremmet.co.uk\/charity-sector\/\"> Charity Assist Team<\/a> on 0330 390 7342 or email\u00a0<\/span><a href=\"mailto:CharityAssist@tayloremmet.co.uk\"><span data-contrast=\"none\">CharityAssist@tayloremmet.co.uk<\/span><\/a><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:0,&quot;335559740&quot;:360}\">\u00a0<\/span><\/p>\n<p><i><span data-contrast=\"none\">This note is intended as a general summary of the relevant legislative changes and does not constitute legal or tax advice. Specific advice should be\u00a0sought\u00a0in relation to individual circumstances.<\/span><\/i><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:0,&quot;335559740&quot;:360}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Finance Act 2026 dealing with amendments affecting charity tax relief took effect on 6 April 2026 and\u00a0form\u00a0part of a wider package of measures intended to strengthen compliance and\u00a0maintain\u00a0confidence in the proper operation of charitable tax reliefs.\u00a0 While many charities will not notice an immediate impact on their day-to-day operations, [&hellip;]<\/p>\n","protected":false},"author":73,"featured_media":5972,"comment_status":"closed","ping_status":"open","sticky":false,"template":"blog_posts.php","format":"standard","meta":{"footnotes":""},"categories":[330],"tags":[],"class_list":["post-5944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-charity-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Charity Tax Relief: Finance Act 2026 Changes<\/title>\n<meta name=\"description\" content=\"Learn how the Finance Act 2026 changes to charity tax relief affect charities, trustees, legacy gifts and tax compliance.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tayloremmet.co.uk\/blogs\/charity-tax-relief-finance-act-2026\/\" \/>\n<meta property=\"og:locale\" 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