Donations to ‘Approved Fundraising Bodies”
The existing tax reliefs for donations to approved sports bodies and National Governing Bodies (NGBs) are being amended to allow an NGB to establish an approved fundraising body, structured as a company limited by guarantee, through which qualifying donations and the associated tax relief can be received.
Amounts received by a fundraising body must generally be transferred to the relevant NGB within 12 months.
The Bill also introduces a new €1 million annual limit on tax-relieved donations made by an individual to sports bodies. A more restrictive limit will apply where the donor is associated with the relevant sports body, in which case tax relief will be limited to donations of up to 10% of the donor’s total income for the year.
It appears these restrictions will not apply to donations from companies.
The measures provide NGBs with greater flexibility in structuring their fundraising activities.
Restructuring
The Bill also addresses a longstanding practical issue for unincorporated sports bodies wishing to incorporate.
New reliefs will allow an unincorporated sports body to transfer its activities and assets to a company limited by guarantee without triggering an immediate Capital Gains Tax, Stamp Duty or Capital Acquisitions Tax charge, subject to certain conditions. Broadly, the reliefs require the entire undertaking to transfer to the new entity, with continuity of the sporting purpose and restrictions on the distribution of assets or profits.
These changes should remove a potentially significant tax obstacle for clubs and other sports bodies seeking the greater governance and legal protections associated with incorporation.