573. Exception from charge.

The charge to tax on the settlor under the provisions discussed above1 does not apply to any qualifying income2 which arises under a settlement the trustees of which are resident3 in the United Kingdom ('a UK settlement') if:


    (1)     it is given by the trustees to a charity4 in the tax year5 in which it arises; or


    (2)     it is income to which a charity is entitled under the terms of the trust6.

Where in any tax year qualifying income arising under a UK settlement from different sources exceeds the amount of that income falling within heads (1) and (2)