The Finance Act 2010 defines charities and other organisations entitled to UK charity tax relief. The statutory definition includes a ‘management condition’ which requires any person having general control and management over the running of a charity or application of its assets to be a ‘fit and proper person’. HMRC has issued detailed guidance on how the ‘fit and proper persons’ test is applied.
The new guidance from HMRC refers to non-exhaustive factors that may lead to HMRC deciding that a Manager is not a‘fit and proper person’. It appears that tax planning professionals may fail the ‘fit and proper’ test where such individuals have used a tax avoidance scheme featuring charitable reliefs or have been involved in designing and/or promoting tax avoidance schemes.