Income and Corporation Taxes Act 1988

[84 F1 Gifts to educational establishments. U.K.

(1) This section applies where [F2 a company carrying on a trade or profession] (“the donor”) makes a gift for the purposes of a designated educational establishment of—

(a) an article manufactured, or of a class or description sold, by the donor in the course of [F3 its trade] which qualifies as [F4 plant or machinery] in the hands of the educational establishment; F5 . . .

(b) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) For the purposes of this section, an article “ [F6 qualifies as plant or machinery] in the hands of an educational establishment” if, and only if, it is an article such that—

(a) were the activities carried on by the educational establishment regarded as a trade carried on by a body of persons, and

(b) had that body, at the time of the gift, incurred capital expenditure wholly and exclusively on the provision of an identical article for the purposes of those activities, and

(c) had the identical article belonged to that body in consequence of the incurring of that expenditure,

the identical article would be regarded for the purposes of [F7 Part 2 of the Capital Allowances Act as plant or machinery] provided by the body for the purposes of that trade.

(3) Where this section applies—

(a) if the gift is of an article falling within paragraph (a) of subsection (1) above, then, for [F8 corporation tax purposes], no amount shall be required to be brought into account as a trading receipt of the donor in consequence of [F9 its disposal] of that article from trading stock; F5 . . .

(b) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

but this subsection shall not apply unless, within [F10 the period specified in subsection (3A) below], the donor makes a claim for relief under this subsection, specifying the article given and the name of the educational establishment in question.

[F11 (3A) The period mentioned in subsection (3) above is [F12 the period of two years beginning at the end of the accounting period in which the gift is made.]

(3B) F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(4) In any case where—

(a) relief is given under subsection (3) above [F14 or section 63(2) of the Capital Allowances Act] in respect of the gift of an article [F15 made by the donor], and

(b) any benefit received in any [F16 accounting period] by the donor or any person connected with [F17 the donor] is in any way attributable to the making of that gift,

the donor shall in respect of that [F16 accounting period] be charged to [F18 corporation] tax under Case I or Case II of Schedule D or, if [F19 the donor] is not chargeable to [F18 corporation] tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.

(5) In this section “designated educational establishment” means any educational establishment designated, or of a category designated,—

(a) as respects Great Britain, in regulations made by the Secretary of State; or

(b) as respects Northern Ireland, in regulations made by the Department of Education for Northern Ireland;

and any such regulations may make different provision for different areas.

(6) If any question arises as to whether a particular establishment falls within a category designated in regulations under subsection (5) above, the Board shall refer the question for decision—

(a) in the case of an establishment in Great Britain, to the Secretary of State, or

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

(7) The power of the Secretary of State to make regulations under subsection (5) above shall be exercisable by statutory instrument; and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of the House of Commons.

(8) Regulations made under subsection (5) above for Northern Ireland—

(a) shall be a statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979; and

(b) shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.

(9) Section 839 applies for the purposes of subsection (4) above.]

Textual Amendments

F1 S. 84 substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 68(1)(2)

F2 Words in s. 84(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(2)(a) (with Sch. 2)

F3 Words in s. 84(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(2)(b) (with Sch. 2)

F4 Words in s. 84(1)(a) substituted (with effect in accordance with s. 579 of the amending Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 17(1)(a)

F5 S. 84(1)(b)(3)(b) and preceding words repealed (with effect in accordance with s. 579 of the repealing Act) by Capital Allowances Act 2001 (c, 2), Sch. 2 para. 17(1)(b)(3), {Sch. 4}

F6 Words in s. 84(2) substituted (with effect in accordance with s. 579 of the amending Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 17(2)(a)

F7 Words in s. 84(2) substituted (with effect in accordance with s. 579 of the amending Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 17(2)(b)

F8 Words in s. 84(3) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(3)(a) (with Sch. 2)

F9 Words in s. 84(3) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(3)(b) (with Sch. 2)

F10 Words in s. 84(3) substituted (with effect in accordance with s. 135(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 21 para. 2(2)

F11 S. 84(3A)(3B) inserted (with effect in accordance with s. 135(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 21 para. 2(3)

F12 S. 84(3A): by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(4) it is provided that "In subsection (3A) for "above is--" to the end substitute "the period of two years beginning at the end of the accounting period in which the gift is made."" (in force 6.4.2005 with effect in accordance with s. 883(1) of the amending Act) (with Sch. 2)

F13 S. 84(3B) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(5), Sch. 3 (with Sch. 2)

F14 Words in s. 84(4)(a) inserted (with effect in accordance with s. 579 of the amending Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 17(4)

F15 Words in s. 84(4) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(6)(a) (with Sch. 2)

F16 Words in s. 84(4) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(6)(b) (with Sch. 2)

F17 Words in s. 84(4) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(6)(c) (with Sch. 2)

F18 Words in s. 84(4) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(6)(d) (with Sch. 2)

F19 Words in s. 84(4) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 58(6)(e) (with Sch. 2)

Modifications etc. (not altering text)

C1 S. 84: functions transferred (1.7.1999 immediately after the coming into force of Scotland Act 1998 (c. 46), s. 53) by The National Assembly for Wales (Transfer of Functions) Order 1999 (S.I. 1999/672), arts. 1(2), 2, Sch. 1