Commentary on Sections Sections 4 to 9: General
29.Sections 4 to 9 provide for the maximum amount of small donations on which a charity may claim a top-up payment for a tax year (referred to as the “specified amount”) to be increased or reduced in certain circumstances (in relation to CASCs the relevant sections are 4, 5 and 9).
30.Sections 4 and 9 reduce the specified amount where a charity or CASC is connected with one or more charities or CASCs within the definition of a connected charity at section 5. The purpose of the connected charity rule is to ensure, as far as possible, that charities or CASCs which operate in a broadly similar way, but are structured differently, receive the same entitlement under the scheme. The rule ensures that charities or CASCs that are already fragmented into smaller charities or CASCs, but are largely structured as one charity or CASC, do not receive too much of an entitlement, and those charities or CASCs that are not fragmented have no incentive to do so.