Part III Income Tax, Corporation Tax and Capital Gains Tax

Chapter II Other provisions

Giving to charity

44 Gifts to charity from certain trusts.

1

Chapter IA of Part XV of the Taxes Act 1988 (liability of settlors) shall not apply to any qualifying income which arises under a trust the trustees of which are resident in the United Kingdom (a “UK trust”) if—

a

it is given by the trustees to a charity in the year of assessment in which it arises; or

b

it is income to which a charity is entitled under the terms of the trust.

2

Subject to subsection (3) below, where in any year of assessment qualifying income arising under a UK trust from different sources exceeds the amount of that income falling within subsection (1) above, that amount shall be rateably apportioned between those sources.

3

Nothing in subsection (2) above shall affect the operation of any requirement that the whole, or any specified part, of the income from a particular source be given to a charity.

4

Where in any year of assessment qualifying income arising under a UK trust exceeds the amount of that income falling within subsection (1) above, any management expenses for that year shall be rateably apportioned between—

a

so much of that income as is equal to that amount; and

b

so much of that income as exceeds that amount.

5

In this section—

  • “charity” has the same meaning as in section 506 of the Taxes Act 1988 and includes each of the bodies mentioned in section 507 of that Act;

  • “qualifying income” means—

    1. i

      income which is to be accumulated;

    2. ii

      income which is payable at the discretion of the trustees or any other person (whether or not the trustees have power to accumulate it); or

    3. iii

      income which (before being distributed) is income of any person other than the trustees;

  • “resident”, in relation to the trustees of a trust, shall be construed in accordance with section 110 of the M1Finance Act 1989;

and the reference to Chapter IA of Part XV of the Taxes Act 1988 includes a reference to that Chapter as it has effect by virtue of section 660E of that Act (application to settlements by two or more settlors).

6

This section has effect in relation to qualifying income arising to a UK trust on or after 6th April 2000.