‘(1) This section applies if, on an application made by a charity (“the new charity”), HMRC certify that in their opinion—

(a) the new charity was created with a view to taking over all of the activities of one other charity (the “old charity”),

(b) the new charity has taken over those activities,

(c) the purposes of the new charity are substantially similar to the purposes of the old charity, and

(d) more than half of the managers of the new charity were old charity managers.

(2) For the purposes of determining whether a charity is eligible under section 2 for a relevant tax year—

(a) things done (or treated as having been done) by or in relation to the old charity before the time of the merger (or after that time but in connection with things done before that time) are to be treated as if they had instead been done by or in relation to the new charity;

(b) the new charity is to be treated as if it had been a charity (as defined by section 17(1)) at any time, before the time of the merger, when the old charity was (or is treated as having been) a charity.

(3) “Relevant tax year” means—

(a) if the old charity does not make a successful top-up claim in respect of small donations made in the year of the merger, that year or any later tax year;

(b) otherwise, any tax year after the year of the merger.

(4) In deciding whether to issue a certificate under this section, HMRC must have regard in particular to the extent to which the property of the old charity has been transferred to the new charity.

(5) HMRC must issue such guidance as they consider appropriate about the exercise of their functions under this section.

(6) Regulations under section 11 may in particular make provision—

(a) about the form and contents of applications under this section;

(b) imposing a time limit for the making of an application;

(c) for an application to require the consent of the old charity if it is in existence at the time of the application;

(d) for appeals against a refusal to issue a certificate under this section.

(7) In this section—

“managers” means the persons having the general control and management of the administration of a charity;

“old charity manager” means a person who was a manager of the old charity immediately before the last of the activities of the old charity were transferred to the new charity;

“time of the merger” means the time when the new charity took over the activities of the old charity (or, if that occurred over a period of time, the end of that period);

“year of the merger” means the tax year in which the time of the merger fell.’—(Sajid Javid.)

This New Clause enables a charity created to take over the activities of another charity to benefit from the gift aid compliance history of the other charity in deciding the new charity’s eligibility under Clause 2.

Brought up, read the First and Second time, and added to the Bill.