Qualifying charitable donations

By Tolley
Corporation_tax_img9

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Qualifying charitable donations
  • Definition
  • Qualifying payments to charity
  • Qualifying disposals of investments to charity
  • Operation of the relief
  • Tainted charity donations

Companies can obtain tax relief for qualifying payments or certain transfers of assets to charity.

For accounting periods ending on or after 1 April 2010, relief for charitable donations is given under the ‘qualifying charitable donations’ provisions in CTA 2010, ss 189–217 (Pt 6). Prior to the tax law rewrite, donations to charity by companies were the last remaining examples of charges on income for companies.

Definition

The definition of ‘qualifying charitable donations’ includes:

  • qualifying cash donations to charity
  • qualifying disposals of investments and land to charity

CTA 2010, s 190

For this purpose, ‘charity’ is defined as:

  • a company or trust that meets the conditions in FA 2010, Sch 6 (see below)
  • Trustees of the National Heritage Memorial Fund
  • the Historic Buildings and Monuments Commission for England
  • a scientific research organisation defined in CTA 2010, s 469
  • clubs registered as community amateur sports clubs (in relation to payments made on or after 1 April 2014)

CTA 2010, s 202

FA 2010, Sch 6 includes a definition of charity for this purpose which, for companies, has effect for accounting periods commencing on or after 1 April 2012.

SI 2012/735 (subscription sensitive)

The definition includes charities based overseas in relevant territories. The relevant territories are EU member states plus Norway and Iceland.

In order to satisfy the definition of charity in FA 2010, Sch 6, a company or trust must meet the following four conditions:

  • it must be established for charitable purposes only (as

More on Corporation tax computations: