You hear a lot about how “the rich” are using charities to effectively reduce their tax to minimal amounts, among other methods.
On the face of it without digging, it obviously makes people angry and detest the rich. But scratching beneath the surface, I’m not quite sure how exactly they would achieve this? In order to claim the tax back from money donated, you still have to… donate money? Which would still equal more than the money claimed back from tax.
So unless they are actually doing something illegal and funneling money through a charity, claiming tax, and then using that money from the charity to fund purchases not related to the charities mission, how exactly is it benefiting the donor (financially)?
In: Economics
I’m an accountant. I used to do the accounts of a charity which was an arts charity, which owned several large important paintings.
It was controlled by a very rich man, which I won’t name, who had donated these paintings and works of art to the charity for display.
Of course, for some period of the year, they were also at his house.
So he got the tax relief on the donation, but also broadly control of the works of of art.
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