Corporation Tax Act 2009

Chapter 7 Trade profits: gifts to charities etc

Relief for certain gifts

105 Gifts of trading stock to charities etc

(1) This section applies if a company carrying on a trade (“the donor”) gives an article for the purposes of—

(a) a charity, a registered club or a body listed in subsection (4), or

(b) a designated educational establishment (see section 106),

and the article is one manufactured, or of a class or description sold, by the donor in the course of the trade.

(2) In calculating the profits of the trade, no amount is required to be brought into account as a receipt in consequence of the disposal of the article.

(3) In this section “registered club” has the meaning given by paragraph 1 of Schedule 18 to FA 2002 (relief for community amateur sports clubs).

(4) The bodies referred to in subsection (1)(a) are—

(a) the Trustees of the National Heritage Memorial Fund,

(b) the Historic Buildings and Monuments Commission for England, and

(c) the National Endowment for Science, Technology and the Arts.

(5) This section needs to be read with section 108 (receipt of benefits by donor or connected person).

106 Meaning of “designated educational establishment”

(1) For the purposes of section 105 “designated educational establishment” means an educational establishment designated, or within a category designated, in regulations made—

(a) for England and Scotland, by the Secretary of State,

(b) for Wales, by the Welsh Ministers, and

(c) for Northern Ireland, by the Department of Education.

(2) The regulations may make different provision for different areas.

(3) If any question arises as to whether an educational establishment is within a category designated in the regulations, an officer of Revenue and Customs must refer the question for decision—

(a) in the case of an establishment in England or Scotland, to the Secretary of State,

(b) in the case of an establishment in Wales, to the Welsh Ministers, and

(c) in the case of an establishment in Northern Ireland, to the Department of Education.

(4) The power of the Secretary of State or the Welsh Ministers to make regulations under this section is exercisable by statutory instrument.

(5) A statutory instrument containing any regulations made by the Secretary of State under this section is subject to annulment in pursuance of a resolution of the House of Commons.

(6) A statutory instrument containing any regulations made by the Welsh Ministers under this section is subject to annulment in pursuance of a resolution of the National Assembly for Wales.

(7) Regulations made under this section by the Department of Education—

(a) are a statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)), and

(b) are subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954 (c. 33 (N.I.)).

107 Gifts of medical supplies and equipment

(1) This section applies if—

(a) a company carrying on a trade makes a gift from trading stock of medical supplies or medical equipment,

(b) it makes the gift for humanitarian purposes, and

(c) the supplies or equipment are for human use.

(2) In calculating the profits of the trade, no amount is required to be brought into account as a receipt in consequence of the gift.

(3) In calculating the profits of the trade, a deduction is allowed for any costs of transportation, delivery or distribution incurred by the company in making the gift.

(4) The deduction is allowed for the accounting period in which the costs are incurred.

(5) The Treasury may by order provide that this section is not to have effect in relation to medical supplies or medical equipment of any description specified in the order.

(6) This section needs to be read with section 108 (receipt of benefits by donor or connected person).

Benefits associated with gifts

108 Receipt of benefits by donor or connected person

(1) This section applies if a company carrying on a trade makes a gift in relation to which relief is given under—

(a) section 105,

(b) section 107(2), or

(c) section 63(2) of CAA 2001 (gifts to charities etc of plant or machinery used in the trade),

and the company, or a person connected with the company, receives a benefit which is in any way attributable to the making of the gift.

(2) This section also applies if—

(a) relief is given under section 107(3) for costs of transportation, delivery or distribution incurred by a company carrying on a trade, and

(b) the company, or a person connected with the company, receives a benefit which is in any way attributable to the company’s incurring of those costs.

(3) An amount equal to the value of the benefit—

(a) is brought into account in calculating the profits of the trade, as a receipt of the trade arising in the accounting period in which the benefit is received, or

(b) if the company has permanently ceased to carry on the trade before the benefit is received, is treated as a post-cessation receipt (see Chapter 15).