Part II Income Tax, Corporation Tax and Capital Gains Tax

Chapter I General

Charities

F124. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C1C225 Donations to charity by individuals.

F61

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F62

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F63

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F63A

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F64

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F65

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F65A

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F65B

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F65C

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F65D

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F65E

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F65F

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F65G

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F65H

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F65I

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F65J

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F66

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F67

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F68

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F69

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F69A

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10

The receipt by a F7charitable company of a gift which is a qualifying donation F8for the purposes of Chapter 2 of Part 8 of the Income Tax Act 2007 (gift aid) shall be treated for the purposes of the F9Corporation Tax Acts, in their application to the F7charitable company, as the receipt, under deduction of income tax at the basic rate for the relevant year of assessment, of an annual payment of an amount equal to the grossed up amount of the gift.

F1110A

Schedule 19 to the Finance Act 2008 contains provision for transitional payments to charitable companies in respect of gifts made in the tax years 2008-09 to 2010-11.

F511

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12

For the purposes of this section—

a

“F10charitable company” has the same meaning as in section 506 of the Taxes Act 1988 and includes each of the bodies mentioned in section 507 of that Act;

F2b

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c

“relevant year of assessment”, in relation to a gift, means the year of assessment in which the gift is made;

d

references, in relation to a gift, to the grossed up amount are to the amount which after deducting income tax at the basic rate for the relevant year of assessment leaves the amount of the gift; F2. . .

F2e

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F413

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26 Company donations to charity.

1

Section 339 of the Taxes Act 1988 (charges on income: donations to charity) shall be amended as follows.

2

In subsection (1) after the word “payment” there shall be inserted the words “ of a sum of money ”.

3

In subsection (2) the words “and is not a close company” shall be omitted.

4

The following subsections shall be inserted after subsection (3)—

3A

A payment made by a close company is not a qualifying donation if it is of a sum which leaves less than £600 after deducting income tax under subsection (3) above.

3B

A payment made by a close company is not a qualifying donation if—

a

it is made subject to a condition as to repayment, or

b

the company or a connected person receives a benefit in consequence of making it and either the relevant value in relation to the payment exceeds two and a half per cent. of the amount given after deducting tax under section 339(3) or the amount to be taken into account for the purposes of this paragraph in relation to the payment exceeds £250.

3C

For the purposes of subsections (3B) above and (3D) below, the relevant value in relation to a payment to a charity is—

a

where there is one benefit received in consequence of making it which is received by the company or a connected person, the value of that benefit;

b

where there is more than one benefit received in consequence of making it which is received by the company or a connected person, the aggregate value of all the benefits received in consequence of making it which are received by the company or a connected person.

3D

The amount to be taken into account for the purposes of subsection (3B)(b) above in relation to a payment to a charity is an amount equal to the aggregate of—

a

the relevant value in relation to the payment, and

b

the relevant value in relation to each payment already made to the charity by the company in the accounting period in which the payment is made which is a qualifying donation within the meaning of this section.

3E

A payment made by a close company is not a qualifying donation if it is conditional on, or associated with, or part of an arrangement involving, the acquisition of property by the charity, otherwise than by way of gift, from the company or a connected person.

3F

A payment made by a company is not a qualifying donation unless the company gives to the charity to which the payment is made a certificate in such form as the Board may prescribe and containing—

a

in the case of any company, a statement to the effect that the payment is one out of which the company has deducted tax under subsection (3) above, and

b

in the case of a close company, a statement to the effect that the payment satisfies the requirements of subsections (3A) to (3E) above.

3G

A payment made by a company is not a qualifying donation if the company is itself a charity.

5

The following subsection shall be inserted after subsection (7)—

7A

In subsections (3B) to (3E) above references to a connected person are to a person connected with—

a

the company, or

b

a person connected with the company;

and section 839 applies for the purposes of this subsection.

6

This section applies in relation to payments made on or after 1st October 1990.

27 Maximum qualifying company donations.

F31

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2

In section 339 of that Act (charges on income: donations to charity) subsection (5) shall be omitted and in subsection (9) for “(5)” there shall be substituted “ (4) ”.

F33

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4

This section applies in relation to accounting periods ending on or after 1st October 1990.