(1)M1A qualifying donation is a payment made by a company to a charity, other than—
[F1(a)a payment which, by reason of any provision of the Taxes Acts (within the meaning of the Management Act) except section 209(4), is to be regarded as a distribution [F2(but see subsections (1A) and (1B) below)]; and]
(b)a payment which is deductible in computing profits or any description of profits for purposes of corporation tax.
[F3(1A)In determining whether a payment is to be regarded as a distribution for the purposes of subsection (1)(a) above, the words in section 209(5) from “; and any amount” to the end are to be disregarded.
(1B)A payment (other than a dividend) made by a company which is wholly owned by a charity is not to be regarded as a distribution for the purposes of subsection (1)(a) above.]
(2)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F5(3A)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3B)A payment made by a [F6company] 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 [F7the limit imposed by subsection (3DA) below] 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.
[F8(3DA)The limit imposed by this subsection is—
(a)where the amount of the payment does not exceed £100, 25 per cent of the amount of the payment;
(b)where the amount of the payment exceeds £100 but does not exceed £1,000, £25;
(c)where the amount of the payment exceeds £1,000, 2.5 per cent of the amount of the payment.
(3DB)Where a benefit received in consequence of making a payment—
(a)consists of the right to receive benefits at intervals over a period of less than twelve months;
(b)relates to a period of less than twelve months; or
(c)is one of a series of benefits received at intervals in consequence of making a series of payments at intervals of less than twelve months,
the value of the benefit shall be adjusted for the purposes of subsection (3C) above and the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
(3DC)Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a payment which is one of a series of payments made at intervals of less than twelve months, the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
(3DD)Where the value of a benefit, or the amount of a payment, falls to be adjusted under subsection (3DB) or (3DC) above, the value or amount shall be multiplied by 365 and the result shall be divided by—
(a)in a case falling within subsection (3DB)(a) or (b) above, the number of days in the period of less than twelve months;
(b)in a case falling within subsection (3DB)(c) or (3DC) above, the average number of days in the intervals of less than twelve months;
and the reference in subsection (3DB) to subsection (3C) above is a reference to that subsection as it applies for the purposes of subsection (3B) above.]
(3E)A payment made by a [F9company] 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)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3G)A payment made by a company is not a qualifying donation if the company is itself a charity.]
[F10(4)Where a company gives a sum of money to a charity—
(a)if the charity is a charitable company, a body mentioned in section 507 or an Association of a description specified in section 508, the gift shall in the hands of the charitable company be treated for the purposes of this Act as if it were an annual payment, and
(b)if the charity is a trust established for charitable purposes only, see section 522 of ITA 2007 (gifts of money from companies).]
F11(5)In any accounting period of a company, the maximum amount allowable under section 338by virtue of subsection (2)(b)of that section in respect of qualifying donations made by the company shall be a sum equal to 3per cent. of the dividends paid on the company’s ordinary share capital in that accounting period .
(6)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(a)a qualifying donation to a charity is made by a company which is wholly owned by a charity, and
(b)the company makes a claim for the donation, or any part of it, to be deemed for the purposes of section 338 to be a charge on income paid in an accounting period falling wholly or partly within the period of nine months ending with the date of the making of the donation,
the donation or part shall be deemed for those purposes to be a charge on income paid in that accounting period, and not in any later period.
A claim under this subsection must be made within the period of two years immediately following the accounting period in which the donation is made, or such longer period as the Board may allow.]
(7AB)For the purposes of this section a company is wholly owned by a charity if it is either—
(a)a company with an ordinary share capital every part of which is owned by a charity (whether or not the same charity); or
(b)a company limited by guarantee in whose case every person who—
(i)is beneficially entitled to participate in the divisible profits of the company, or
(ii)will be beneficially entitled to share in any net assets of the company available for distribution on its winding up,
is or must be a charity or a company wholly owned by a charity.
(7AC)For the purposes of subsection (7AB) above ordinary share capital of a company shall be taken to be owned by a charity if there is a charity which—
(a)within the meaning of section 838 directly or indirectly owns that share capital; or
(b)would be taken so to own that share capital if references in that section to a body corporate included references to a charity which is not a body corporate.]
[F14(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.]
(8)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9)M2For the purposes of this section “charity” includes [F15each of the bodies mentioned in section 507, and F16. . . ] any Association of a description specified in section 508, but, subject to that, in this section “charity” has the same meaning as in section 506.
[F17(10)In this section “charitable company” has the same meaning as in section 506.]
Textual Amendments
F1S. 339(1)(a) substituted (with effect in accordance with s. 40(11) of the amending Act) by Finance Act 2000 (c. 17), s. 40(2)
F2Words in s. 339(1)(a) inserted (with effect in accordance with s. 57(4) of the amending Act) by Finance Act 2006 (c. 25), s. 57(2)
F3S. 339(1A)(1B) inserted (with effect in accordance with s. 57(4) of the amending Act) by Finance Act 2006 (c. 25), s. 57(3)
F4S. 339(2)(3)(3A)(3F)(6)(7)(8) repealed (with effect in accordance with s. 40(11) of the repealing Act) by Finance Act 2000 (c. 17), s. 40(3), Sch. 40 Pt. 2(1), Note 2
F51990 s.26(4)in relation to payments made on or after 1October 1990.
F6Words in s. 339(3B) substituted (with effect in accordance with s. 58(4) of the amending Act) by Finance Act 2006 (c. 25), s. 58(2)
F7Words in s. 339(3B)(b) substituted (with effect in accordance with s. 40(11) of the amending Act) by Finance Act 2000 (c. 17), s. 40(4)
F8S. 339(3DA)-(3DD) inserted (with effect in accordance with s. 40(11) of the amending Act) by Finance Act 2000 (c. 17), s. 40(5)
F9Words in s. 339(3E) substituted (with effect in accordance with s. 58(4) of the amending Act) by Finance Act 2006 (c. 25), s. 58(3)
F10S. 339(4) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 51(2) (with Sch. 2)
F11 Repealed by 1990 ss.27(2)and 132and Sch.19 Part IVin relation to accounting periods ending on or after 1October 1990.
F12S. 337(7AA)-(7AC) inserted (with effect in accordance with s. 64(2) of the amending Act) by Finance Act 1997 (c. 16), s. 64(1)
F13S. 339(7AA) substituted (with effect in accordance with s. 40(11) of the amending Act) by Finance Act 2000 (c. 17), s. 40(7)
F141990 s.26(5)in relation to payments made on or after 1October 1990.
F151989 s.60(2)in respect of payments due on or after 14March 1989.Previously
“the Trustees of the National Heritage Memorial Fund and the Historic Buildings and Monuments Commission for England and, additionally, in subsections (1) to (5) above includes the Trustees of the British Museum, the Trustees of the British Museum (Natural History) and”.
F16Words in s. 339(9) repealed (with effect in accordance with s. 40(11) of the repealing Act) by Finance Act 2000 (c.17), s. 40(8), Sch. 40 Pt. 2(1), Note 2
F17S. 339(10) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 51(3) (with Sch. 2)
Modifications etc. (not altering text)
C1 See 1990 s.94re production of books etc. in respect of repayment claims in respect of payments made on or after 1October 1990.
Marginal Citations
M1Source-1986 s.29(1), (2)
M2Source-1981 s.49; 1983 s.46(3); 1986 s.29(6)