PART 2Associations, object and profits
Income spending condition5
1
The income spending condition in relation to an accounting period is that the Association must apply, or intend to apply, at least 75% of the amount of its relevant income of the accounting period to activities that are treated as research and development which may lead to or facilitate an extension of any class or classes of trade.
This is subject to paragraphs (2) and (3).
2
Paragraph (3) applies in a case where an Association—
a
intends to apply an amount of its relevant income of an accounting period to activities that are treated as research and development, and
b
intends to so apply the amount after the accounting period in which the relevant income arose.
3
Where this paragraph applies—
a
the activities, to which the amount referred to in paragraph (2) is to be applied, must be planned or programmed to be undertaken by or on behalf of the Association; and
b
the plan or programme of activities must have been prepared on or before the last day of the accounting period.