Qualifying charitable donations

Produced by Tolley

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

  • Qualifying charitable donations
  • Definition of qualifying charitable donation
  • Conditions for qualifying payments to charity
  • Conditions as to repayment
  • Restrictions on associated benefits
  • Qualifying disposals of investments to charity
  • Additional requirements relating to qualifying disposals of land
  • Operation of relief for charitable donations
  • Tainted charitable donations

Qualifying charitable donations

Companies can obtain corporation tax relief for qualifying payments or certain transfers of assets to charity under the qualifying charitable donations regime.

Definition of qualifying charitable donation

The definition of ‘qualifying charitable donations’ includes:

  1. qualifying cash donations to charity

  2. qualifying disposals of investments and land to charity

CTA 2010, s 190

For this purpose, ‘charity’ is defined as:

  1. a company or trust that meets the conditions in FA 2010, Sch 6 (see below)

  2. Trustees of the National Heritage Memorial Fund

  3. the Historic Buildings and Monuments Commission for England

  4. a scientific research organisation defined in CTA 2010, s 469

  5. clubs registered as community amateur sports clubs

CTA 2010, s 202

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

  1. it must be established for charitable purposes only (as defined by Charities Act 2006, s 2)

  2. it must meet the jurisdictional condition (ie under the jurisdiction of the UK courts or the courts in a relevant territory)

  3. it must meet the registration condition (ie has complied with any requirement to be included in the register of charities kept under Charities Act 2011, s 29 ― or with a similar requirement to be included in an equivalent register in a relevant territory)

  4. it must meet the management condition (ie the management is made up of fit and proper persons)

FA 2010, Sch 6, paras 1–7, 33–34

For charities in England and Wales (supervised by the Charity Commission), this does not necessarily mean that they must be registered, as some types of charity are either not permitted to or not required to register. See Charities Act 2011, s 30.

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

Conditions for qualifying payments to charity

In order to qualify, a payment must meet all of the following conditions:

  1. the payment must be of money

  2. there must be no condition

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