Part 10Special rules about charitable trusts etc

Gifts and other payments

523Payments from other charities: income tax liability and exemption

1

This section applies to payments which—

a

are received by charitable trusts from other charities,

b

are not made for full consideration in money or money’s worth,

c

are not charged to income tax, apart from this section, and

d

are not of a description which (on a claim) would be exempt from income tax under any of the exemptions conferred by this Part.

2

This section does not apply to a payment which arises from a source outside the United Kingdom.

3

Income tax is charged under this section on the payments.

4

It is charged on the full amount of the payments arising in the tax year.

5

But a payment is not taken into account in calculating total income so far as it is applied to charitable purposes only.

6

The amount charged under this section in the case of certain payments made by the trustees of a charitable trust in the exercise of a discretion is subject to section 494 (grossing up of discretionary payments from trusts).

7

The trustees of the charitable trust are liable for any tax charged under this section.