Income Tax (Trading and Other Income) Act 2005 (c. 5)

Part 2 U.K. Trading income

Chapter 7 U.K. Trade profits: gifts to charities etc.

107 Professions and vocations U.K.

The provisions of this Chapter apply to professions and vocations as they apply to trades.

108 Gifts of trading stock to charities etc. U.K.

(1) This section applies if a person 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 110),

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 [F1 section 658 of CTA 2010 (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,

(c) F2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) F2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) This section [F4 —

(a)] needs to be read with section 109 (receipt by donor or connected person of benefit attributable to certain gifts)[F5 , and

(b) is subject to section 809ZM of ITA 2007 (removal of income tax relief in respect of tainted charity donations etc).]

Textual Amendments

F1 Words in s. 108(3) substituted (1.4.2010) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 446 (with Sch. 2)

F2 S. 108(4)(c)(d) repealed (6.4.2007 with effect as noted in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1031, 1034, Sch. 1 para. 500, Sch. 3 Pt. 1 (with transitional provisions and savings in Sch. 2)

F3 S. 108(4)(e) omitted (1.4.2012) by virtue of The Public Bodies (Abolition of the National Endowment for Science, Technology and the Arts) Order 2012 (S.I. 2012/964), arts. 1(2), 3(1), Sch.

F4 S. 108(5)(a): words in s. 108(5) renumbered as s. 108(5)(a) (with effect in accordance with Sch. 3 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 3 para. 6(a)

F5 S. 108(5)(b) and word inserted (with effect in accordance with Sch. 3 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 3 para. 6(b)

Modifications etc. (not altering text)

C1 S. 108 excluded (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 445(1), 1034 (with transitional provisions and savings in Sch. 2)

109 Receipt by donor or connected person of benefit attributable to certain gifts U.K.

(1) This section applies if a person carrying on a trade (“the donor”) makes a gift in relation to which—

(a) section 108 applies, or

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

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

(2) 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 on the date on which the benefit is received, or

(b) if the donor has permanently ceased to carry on the trade before that date, is treated as a post-cessation receipt (see Chapter 18).

110 Meaning of “designated educational establishment” U.K.

(1) For the purposes of section 108 “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 National Assembly for Wales, 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, [F6 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 National Assembly for Wales, 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 National Assembly for Wales 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) 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.)).

Textual Amendments

F6 Words in s. 110(3) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), ss. 50, 53(1), Sch. 4 para. 132(1); S.I. 2005/1126, art. 2(h)