| Commentary

137 Setting up a trading company

| Commentary

G: STRUCTURING CHARITABLE TRADING

137 Setting up a trading company

It is common for charities to engage in non-primary trading activities (ie activities that do not further the charity’s purposes but which are undertaken to raise funds) as a means of fund-raising. However, income produced by such activities will attract income tax or corporation tax unless an exemption is available1. Charities often carry out non-primary purpose trading by carrying on the trade through a separate, non-charitable company which is wholly owned by the charity2. Corporate profits may then be donated to the charity so that an exemption from corporation tax is

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