IRS Rules for Charities and Nonprofits in the UK

When it comes to IRS rules, regulations set by the U.S. Internal Revenue Service that govern tax-exempt organizations. Also known as U.S. nonprofit tax law, these rules don’t directly apply in the UK—but they still matter if your charity works with American donors, holds U.S. assets, or runs a charitable trust with cross-border elements. Many UK groups assume IRS rules are irrelevant here, but if you’re managing a charitable trust, a legal structure that holds assets for charitable purposes, often with income payouts to beneficiaries that includes U.S. beneficiaries or investments, you need to know how IRS requirements could impact your filings, tax status, or even donor eligibility.

For example, a charitable remainder trust, a type of trust that pays income to individuals first, then gives the remainder to charity set up by a UK resident with U.S. assets might trigger IRS reporting even if the charity is based in Minehead. The IRS doesn’t care where you live—it cares where the money flows. If your trust earns U.S. interest, sells U.S. stocks, or receives donations from U.S. taxpayers claiming deductions, the IRS wants to see Form 990-T or other filings. Ignoring this can mean penalties, frozen assets, or lost tax benefits for your donors.

UK charities often rely on tax exemption, the legal status that lets qualifying organizations avoid paying income or capital gains tax on their charitable activities under HMRC rules. But if your charity also interacts with U.S. systems—say, through online fundraising platforms like GoFundMe or PayPal that route funds through U.S. servers—you might accidentally trigger U.S. tax obligations. The IRS doesn’t recognize UK charity status. Even if you’re fully compliant here, you could still be flagged abroad.

Most of the posts in this collection focus on UK-specific support like Carer’s Allowance, Direct Payments, and charity shop volunteers—but a few touch on cross-border issues. One post explains how charitable trusts manage investments and tax compliance, while another dives into whether trusts pay taxes. These aren’t just theoretical. People in Minehead and beyond are setting up trusts for elderly relatives, donating to U.S.-linked causes, or receiving funds from American foundations. They need to know: Does the IRS care? What paperwork do they need? And what happens if they don’t file?

You won’t find a U.S. tax code here, but you will find real examples of how IRS rules quietly affect UK charities. Whether you’re managing a trust, handling donations from overseas, or just trying to avoid a surprise tax bill, this collection gives you the clear, practical info you need—not legal jargon, not theory, just what works when the rules cross oceans.