3.34.1 This section explains when educational trusts (Trusts) can claim Gift Aid in respect of payments made to such Trusts by parents and persons connected to a pupil. 3.34.2 A Trust is established to provide education for children as an alternative to state education. Parents may pay for textbooks, exercise books, exam fees and consumable materials. However, they’re often not required to pay any set fees to cover the costs of tuition and other overheads, but instead may make payments described as donations. 3.34.3 The payment of fees to a charity is not a gift to charity and so fees paid to a Trust are not eligible for the Gift Aid Scheme. Whether non-fee payments (donations) made by parents (and persons connected to them) to a Trust qualify as Gift Aid payments depends upon the surrounding circumstances and the situation for each Trust is judged on its own merits. 3.34.4 There’s a cost in providing education for a child and if that cost is met in consequence of the Gift Aid payments being made to the Trust then that cost is a benefit for the purposes of the Gift Aid Scheme. This includes the cost of tuition, heating and lighting of premises and other administrative costs, which would be taken into account by a private school in setting fees. Whether or not a benefit is received ‘in consequence of’ the Gift Aid payments is a question of fact to be determined in the light of the surrounding circumstances. In particular, it’s important to consider whether the Trust would be able to meet the costs of providing the education in the absence of the donations. In considering whether the level of fees is sufficient to cover operating costs trusts can take account of reliable, ongoing income sources such as endowments, but not one-off or periodic donations or grants where no binding commitment exists. 3.34.5 As far as alternative sources of funding are concerned, these are relevant only in as much as they form part of all the circumstances a court might look at in deciding whether the overall funding structure was genuinely able to maintain the activities of the charitable trust to the extent that additional contributions from individuals receiving a benefit were unnecessary. 3.34.6 Where the trust has a genuine fee structure in place HMRC will accept that the benefit of receiving education arises from payment of the fees. Consequently, the receipt of education would not be received as a consequence of making donations over and above the fees and so those donations could qualify for Gift Aid. A genuine fee structure is one where fees are charged in respect of all students and the fees are set at such a level that enables the Trust to operate without needing additional support. 3.34.7 Where there’s no fee structure or only nominal fees are charged, insufficient to enable the trust to operate without additional donations the additional donations give rise to a benefit. Such consequential benefits will generally be in excess of the benefit limits for donations made by parents and persons connected to them and so the donations will usually fail as Gift Aid payments. 3.34.8 Where there’s no fee structure or only nominal fees are charged, but sufficient alternative, unconnected, funding sources can be clearly identified, there will be no benefit arising as a consequence of donations from persons connected with the children receiving education. In situations where this is clearly the case, providing the other Gift Aid criteria are met, Gift Aid relief might be available on those donations.