The following Private Client practice note produced in partnership with Jacqui Lazare of Clarke Willmott provides comprehensive and up to date legal information covering:
The key legislation setting out charitable donations relief for companies is enshrined within Part 6 of the Corporation Tax Act 2010 (CTA 2010). There are five main forms of giving to charity as a company, namely:
donating equipment and trading stock
donating land, property and shares
sponsoring a charity
A limited company can pay less corporation tax when it gives money to a charity or Community Amateur Sports Club (CASC). The value of the donation is deductible from the total business profits before tax. However, it is not possible to deduct:
loans that will be repaid by the charity
payments made on condition the charity will buy property from the company or anyone connected with it
a distribution of company profits (eg dividends)
Any benefits given to the company in return (eg tickets to an event) must be below a certain value and applies to benefits given to any person or company connected with the company, including close relatives.
If a benefit is received by the company, or a person connected with it, that will qualify the donation as a sponsorship payment.
Where equipment is donated, the company can claim full capital allowances on the cost of that equipment. However, to qualify, the equipment must have been used by the company.
If a company donates its trading stock to
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