Gaelic GamesTax Implications

What each GAA club will receive following JP McManus’s €32m donation

Depending on the circumstances and the tax paid by JP McManus in both jurisdictions, his largesse could be even more valuable for clubs

JP McManus chats with Tom Morrissey after Limerick's win over Kilkenny in the 2022 All-Ireland hurling final. Photograph: James Crombie/Inpho
JP McManus chats with Tom Morrissey after Limerick's win over Kilkenny in the 2022 All-Ireland hurling final. Photograph: James Crombie/Inpho
Dominic Coyle's picture
Dominic Coyle
Thu Dec 14 2023 - 19:48

JP McManus’s support of the GAA community is long-standing and widely known. And his latest largesse is good news for the thousands of GAA clubs across the country – whether they are affiliated to the GAA, the Ladies Gaelic Football Association or the Camogie Association.

How much each club receives will depend on the number of clubs in that county, with the figures running from roughly €2,660 in Cork to €30,300 in Sligo. Clubs in over two-thirds of counties will see payments in excess of €10,000 each.

Charitable contributions can avail of tax relief in certain circumstances although, unsurprisingly, those rules can be different in different jurisdictions, so the county boards in Northern Ireland will face a slightly different regime.

In general, in the Republic, the recipient of a charitable donation from an individual can enhance the value of that money by claiming back tax that the donor has paid to Revenue.

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This only works where the donor gives the beneficiary of the money their permission to apply for tax relief by filling out a form called a CHY4. The charity or other approved body – in this case the county boards – then sends the form back to Revenue and can get an additional tax relief of 31 per cent of the value of the original charitable donation.

That means a charitable gift of €1,000 can be worth €1,449 to the group receiving it.

[ JP McManus’s cash injection will go straight to GAA’s grassroots ]

If the person making the donation is considered to be connected to the recipient – perhaps because they work for the organisation – the relief is capped at 10 per cent of their annual income.

To qualify, the charitable donation must be somewhere between €250 and €1 million in a tax year. And, sensibly, the amount of tax relief a charity or charities get cannot exceed the tax the donor has paid during the year.

[ JP McManus profile: ‘I paid my taxes and I set up a business abroad’ ]

If the money is funnelled through a company rather than personally by an individual, the relief goes to the company. It is more modest with the amount given classed as a trading expense and subject to relief from corporation tax, which for now is charged at 12.5 per cent though that is due to rise to 15 per cent. This means that it will currently cost a company €875 to make a charitable donation of €1,000.

Charitable donations north of the Border are also tax free to the donor. And, if that person pays tax in the UK, the group benefiting form the money can claim additional relief at a rate of 25 per cent on the donation.

This is done through a system called Gift Aid and, much like in the Republic, requires the donor to complete a form for each donation. So, in practice you need their permission to claim against tax they have paid. The club or other group also needs either to be a registered charity or listed on the UK Inland Revenue’s CASC – community amateur sports club – register.

From the point of view of an individual donor, there is no personal benefit from giving to charity. People can reduce their income tax bills by donating items of specific cultural value to the State’s national collections but that is an entirely separate scheme.

In Mr McManus’s case, this is the second time he has handed money out across the GAA, having given each county board €100,000 back in 2018. He has also been a long-term supporter of the GAA in his native Limerick.