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.