Michael McGrath (Cork South Central, Fianna Fail)
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For donations to charities or “approved bodies” (such as certain educational institutions) and for donations to an approved sports bodies for funding of an approved project, in both cases the minimum donation which attracts tax relief is €250; the tax relief on either type of donation cannot exceed the amount of income tax paid by the donor; and where the taxpayer has claimed reliefs such as medical expenses, the amount of tax relief available to the charity or sports body is the net amount paid by the individual after such reliefs are claimed. However, there are some differences between the types of relief available for the two types of donation.

For donations to charities or “approved bodies”, tax relief under section 848A Taxes Consolidation Act 1997 (TCA) on donations made by both self-assessed or PAYE-only individuals under the Charitable Donation Scheme (CDS) is given to the body rather than to the donor. A donation which satisfies the conditions of the section is grossed up at the “specified rate” (currently 31%). To enable the charity to claim the tax relief, the individual (PAYE or self-assessed) must complete a CHY 3 or CHY 4 form. For example, if an individual makes a donation of €690 to an approved charity, this equates in all cases to a grossed up amount of €1,000 when it is regrossed at the specified rate, i.e. (€690 + €310). However, if the donor in question has paid less than €310 in income tax, the tax relief is capped at the amount of income tax she has paid.

The donor completes an annual certificate or an enduring certificate containing the necessary details – including the amount of the donation and the donor’s Personal Public Service Number (PPSN) - and gives it to the approved body to allow the body to make their repayment claim to Revenue. An enduring certificate, which lasts for 5 years, allows an approved body claim tax relief in respect of donations made by the donor during the lifetime of the certificate without the need to obtain an annual certificate.

More information on the Charitable Donations Scheme can be found on Revenue's website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-36/36-00-17.pdf.

The legislation dealing with donations to approved sports bodies for approved capital projects is provided for in section 847A TCA. The tax treatment of a donation depends on whether the individual pays all her income tax under the PAYE system or is a self-assessed taxpayer.

Where a PAYE-only taxpayer who is not obliged to file a tax return makes a donation to an approved sports body, the tax relief for the donation will apply at the taxpayer’s marginal rate – that is, the standard rate (currently 20%) or the higher rate (currently 40%). For example, if an individual who has a marginal income tax rate of 40% makes a qualifying donation of €600 to an approved sports body, that body is deemed to have received €1,000 less tax of €400 and the body can claim a refund of €400 from Revenue at the end of the year. As above, if the donor has paid less than €400 in tax, the relief available is capped at the amount of income tax actually paid. A PAYE-only donor must supply the sports body with an “appropriate certificate” to allow the body to claim the tax relief.

Individuals taxed under the self-assessment system who make a donation to an approved sports body for an approved capital project can claim the relief on their annual tax returns as a deduction from total income. The approved sports body does not claim further relief on such donations.

More information on donations to approved sports bodies can be found on Revenue's website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-36/36-00-14.pdf.