Hi folks,
A client has asked if he can pay his son's school fees through his LTD, as a company donation.
The school is a registered charity, and the amounts requested are clearly voluntary (voluntary educational supplements).
There are no invoices issued to him personally.
What do you think?
Replies (11)
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Subject covered frequently. Not sure how school fees can be voluntary.
Seems to lack the appearance of a charitable donation.
The director will do well to argue successfully that no taxable benefit arises.
If the donations are voluntary why doesn't he send his son to the school anyway and direct his donations to the poor and needy in less fortunate parts of the world?
If the donations are voluntary...
.. and he (or his family) get no benefit from them, then they are not fees...
If you search this website
You will come across the grandparent trust solution to this, which works fine in my view.
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Thanks for the responses.
To clarify, these are not school fees (apologies if this was unclear in my original post).
The school have simply requested a voluntary contribution.
So to be even more clear, if no donation were made (or promised etc), the school would still educate the son?
Check
It seems more than likely that the "donations" are in fact school fees. If the director is insistent that they are donations unconnected to their son's education, at least get them to say as much in writing. I would expect HMRC to take close interest in such an arrangement. As far as i am aware, yes
"School fees" was your actual
"School fees" was your actual description.
So the school's willingness to educate the son is unconnected with the father's willingness to direct a donation towards it?
Gift aid
Not my area, but what the heck!
Is it likely that the school (a charity?) is likely to seek gift aid on these purely voluntary donations? If so, I would expect the revenue to be somewhat suspicious these are school fees in reality.
Personally, I'd take the view that the £25k or so that I have already paid in fees is more than enough and would give the donations to a really needy cause, who can also claim gift aid (and give you an income tax deduction without question?)
wow, pretending to be a proper full tax specialist!