414A Tax reduction or charge if basic rate, and devolved basic rate, differ
(1) Subsections (3) and (4) apply if an individual makes a gift to a charity which is a qualifying donation, and for the tax year in which the gift is made—
(a) the individual is a Scottish taxpayer or a Welsh taxpayer,
(b) there is a difference between—
(i) the applicable devolved basic rate, and
(ii) the basic rate, and
(c) any of the individual’s income is liable to the applicable devolved basic rate.
(2) In this section—
“the applicable devolved basic rate”—
is the Scottish basic rate if the individual is a Scottish taxpayer, and
is the Welsh basic rate if the individual is a Welsh taxpayer,
“the ADBR amount” is the amount of the individual’s income liable to the applicable devolved basic rate, and
“the rate difference” means the difference between the basic rate and the applicable devolved basic rate.
(3) If, for the tax year in which the gift is made, the applicable devolved basic rate is above the basic rate—
(a) the individual is entitled to a tax reduction for that tax year,
(b) the tax reduction is given effect at Step 6 of the calculation in section 23,
(c) where the ADBR amount is more than or equal to the grossed up amount of the gift, the amount of the tax reduction is equal to the grossed up amount of the gift multiplied by the rate difference, and
(d) otherwise, the amount of the tax reduction is equal to the ADBR amount multiplied by the rate difference.
(4) If, for the tax year in which the gift is made, the applicable devolved basic rate is lower than the basic rate—
(a) income tax is charged under this subsection for that tax year,
(b) the individual is the person liable for the tax,
(c) where the ADBR amount is more than or equal to the grossed up amount of the gift, the amount of the tax is equal to the grossed up amount of the gift multiplied by the rate difference, and
(d) otherwise, the amount of the tax is the ADBR amount multiplied by the rate difference,
but see subsection (5).
(5) If, in the case of an individual (and ignoring this subsection), the total amount of tax charged under subsection (4) for a tax year is greater than the individual’s section 414(2)(b) tax saving for that year, the total amount of that tax is limited so as to be equal to the individual’s section 414(2)(b) tax saving for that year.
(6) For the purposes of subsection (5), the amount of an individual’s “section 414(2)(b) tax saving” for a tax year is—
(a) if the amount calculated at Step 5 of the calculation in section 23 in the individual’s case for that year is less than it would be were section 414(2)(b) not to have effect, equal to the difference, and
(b) otherwise is nil.
In this Chapter references to the grossed up amount of a gift are to the amount of the gift grossed up by reference to the basic rate for the tax year in which the gift is made ... .
(1) A gift made to a charity by an individual is a qualifying donation for the purposes of this Chapter if—
(a) conditions A to F are met, and
(b) the individual, or an intermediary representing the individual, gives the charity, or an intermediary representing the charity, a gift aid declaration relating to the gift (see section 428).
(1A) For the purpose of subsection (1)(b) an intermediary is—
(a) a person authorised by the individual to give a gift aid declaration on behalf of that individual to the charity,
(b) a person authorised by a charity to receive a gift aid declaration on behalf of that charity, or
(c) a person authorised to perform both of the roles described in paragraphs (a) and (b).
(2) Condition A is that the gift takes the form of a payment of a sum of money.
(3) Condition B is that the payment is not subject to any condition as to repayment.
(4) Condition C is that the payment is not a sum falling within section 713(3) of ITEPA 2003 (payroll deduction scheme).
(5) Condition D is that the payment is not deductible in calculating the individual's income from any source.
(6) Condition E is that the payment is not conditional on, associated with or part of an arrangement involving, the acquisition of property by the charity from the individual or a person connected with the individual.
An acquisition by way of gift is ignored for the purposes of this condition.
(6A) Condition EA is that the payment is not by way of, and does not amount in substance to, waiver by the individual of entitlement to sums (whether of principal or return) due to the individual from the charity in respect of an amount—
(a) advanced to the charity, and
(b) in respect of which a person, whether or not the individual, has obtained relief under Part 5B (relief for social investments).
(7) Condition F is that—
(a) there are no benefits associated with the gift, or
(b) there are benefits associated with the gift but the restrictions on those benefits are not breached.
See sections 417 to 421 for provision about benefits associated with gifts.
(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A benefit is associated with a gift for the purposes of this Chapter if it is received by the individual who makes the gift, or a person connected with the individual, in consequence of making the gift.
(1) For the purposes of section 416(7), the restrictions on benefits associated with a gift are breached if condition A or B is met.
(2) Condition A is that the total value of the benefits associated with the gift exceeds the variable limit, which is—
(a) in a case where the amount of the gift is £100 or less, 25% of that amount, and
(b) in a case where the amount of the gift exceeds £100, the sum of £25 and 5% of the amount of the excess.
(3) Condition B is that the sum of—
(a) the total value of the benefits associated with the gift, and
(b) the total value of the benefits (if any) associated with each relevant prior gift,
is more than £2,500.
(4) “Relevant prior gift” means a gift—
(a) which has already been made by the individual to the charity in the tax year, and
(b) which is a qualifying donation.
(5) This section needs to be read with sections 419 to 421.
419 Gifts and benefits linked to periods of less than 12 months
(1) This section modifies the application of section 418(2) in relation to a gift if condition A, B, C or D is met.
(2) Condition A is that a benefit associated with the gift relates to a period of less than 12 months.
(3) Condition B is that a benefit associated with the gift consists of a right to receive benefits at intervals over a period of less than 12 months.
(4) Condition C is that a benefit associated with the gift is one of a series of benefits which are—
(a) received at intervals, and
(b) associated with a series of gifts made at intervals of less than 12 months.
(5) Condition D is that—
(a) a benefit associated with the gift is not one of a series of benefits received at intervals, and
(b) the gift is one of a series of gifts made at intervals of less than 12 months.
(6) If condition A, B or C is met, then for the purposes of section 418(2)—
(a) the value of the benefit is taken to be the annual equivalent of its actual value, and
(b) the amount of the gift is taken to be the annual equivalent of its actual amount.
(7) If condition D is met, the amount of the gift is taken for the purposes of section 418(2) to be the annual equivalent of its actual amount.
(8) The annual equivalent of the value of a benefit, or of the amount of a gift, is calculated as follows.
Step 1
Multiply the value or amount by 365.
Step 2
If condition A or B is met in relation to the benefit (and neither condition C nor condition D is met in relation to it), divide the result by the number of days in the period of less than 12 months referred to in subsection (2) or (as the case may be) subsection (3).
If condition C or D is met in relation to the benefit, divide the result by the average number of days in the intervals of less than 12 months referred to in subsection (4)(b) or (as the case may be) subsection (5)(b).
(1) A benefit associated with a gift is ignored for the purposes of this Chapter if the benefit consists of a relevant right of admission.
(2) “Right of admission” means a right which—
(a) benefits the individual who makes the gift or that individual and one or more members of that individual's family (whether or not the right must be exercised by all of them at the same time),
(b) authorises admission to premises or property to which the public are admitted on payment of an admission fee, and
(c) authorises admission to those premises or that property without payment of the admission fee or on payment of a reduced fee.
(3) A right of admission is a relevant right of admission if—
(a) conditions A and B are met in relation to it, and
(b) either condition C or condition D is met in relation to it.
(4) Condition A is that the opportunity to make a gift and to receive the right of admission in consequence is available to the public.
(5) Condition B is that the right of admission is a right granted by the charity for the purpose of viewing property preserved, maintained, kept or created by a charity for its charitable purposes.
(6) The property mentioned in subsection (5) includes, in particular—
(a) buildings,
(b) grounds or other land,
(c) plants,
(d) animals,
(e) works of art (but not performances),
(f) artefacts, and
(g) property of a scientific nature.
(7) Condition C is that the right of admission applies, during a period of at least 12 months, at all times at which the public can obtain admission.
(8) Condition D is that—
(a) a member of the public could purchase the same right of admission, and
(b) the amount of the gift is greater by at least 10% than the amount the member of the public would have to pay.
(9) This section needs to be read with section 421.
(1) This section applies for the purposes of section 420.
(2) Condition C is to be treated as met even if the right does not apply on days which are specified by the charity as event days, provided no more than 5 days are so specified in relation to the applicable period.
(3) The applicable period is—
(a) the period during which the right applies, in the case of a right which applies for a period of 12 months, or
(b) each calendar year during all or part of which the right applies, in the case of a right which applies for a period of more than 12 months.
(4) An “event day” is a day on which an event is to take place on the premises to which the right relates.
(5) In condition D the “same right of admission” means a right relating to the same property, classes of persons and periods of time as the right received in consequence of the gift.
(1) This section applies if—
(a) an individual makes one or more gifts to charities in a tax year which are qualifying donations, and
(b) amount A is greater than amount B.
(2) In this section—
“amount A” means the total amount of the tax treated as deducted from the gifts under section 414, and
“amount B” means the total amount of income tax and capital gains tax to which the individual is charged for the tax year (before applying this section).
(3) For the purposes of this section, the total amount of income tax to which the individual is charged for the tax year is the amount calculated in accordance with section 425.
(4) The individual's entitlement to the reliefs mentioned in subsection (5) is extinguished, so far as is necessary to ensure that the total amount of income tax and capital gains tax to which the individual is charged for the tax year (after applying this section)—
(a) is equal to amount A, or
(b) if that is not possible, falls short of amount A by as little as possible.
(5) The reliefs are—
(a) an allowance under Chapter 2 of Part 3 of this Act ... (personal allowance and blind person's allowance),
(b) a tax reduction under Chapter 3 of Part 3 of this Act ... (tax reductions for married couples and civil partners), and
(c) relief under section 457 or 458 of this Act ... (payments to trade unions and police organisations), ...
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Income tax is charged under this section if—
(a) an individual makes one or more gifts to charity in a tax year which are qualifying donations, and
(b) amount A is greater than amount C.
(2) In this section—
“amount A” means the total amount of the tax treated as deducted from the gifts under section 414, and
“amount C” means the sum of—
the amount of income tax to which the individual is charged for the tax year, and
the amount of capital gains tax to which the individual would be chargeable for the tax year if the following were ignored—
(i) any relief under sections 2 and 6 of TIOPA 2010
(ii) any relief under section 18(1)(b) and (2) of TIOPA 2010 (relief for foreign tax where no double taxation arrangements).
(3) For the purposes of this section, the total amount of income tax to which the individual is charged for the tax year is the amount calculated in accordance with section 425, after taking into account any restriction of relief under section 423.
(4) The amount of the tax charged under this section is equal to the difference between amount A and amount C.
(5) Tax charged under this section is charged for the tax year in which the gift or gifts are made.
(6) The person liable for any tax charged under this section is the individual.
425 Total amount of income tax to which individual charged for a tax year
(1) For the purposes of sections 423 and 424, the total amount of income tax to which an individual is charged for a tax year is the amount calculated as follows.
(2) Calculate the individual's liability to income tax for the tax year in accordance with section 23, as modified by subsection (3).
(3) In applying section 23—
(a) at Step 6, ignore any tax reductions to which the individual is entitled for the tax year under a provision listed in subsection (4), and
(b) ignore Step 7.
(4) The tax reductions to be ignored are tax reductions under—
(a) section 453 (qualifying maintenance payments),
(b) sections 2 and 6 of TIOPA 2010 (double taxation arrangements: relief by agreement), or
(c) section 18(1)(b) and (2) of TIOPA 2010 (relief for foreign tax where no double taxation arrangements).
(5) From the amount calculated in accordance with subsections (2) to (4) deduct—
(a) any tax treated as having been paid under—
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(iv) section 530(1) of that Act (gains from contracts for life insurance), or
(v) section 685A(3) of that Act (settlor-interested settlements), ... and
(b) any tax treated as deducted from estate income under section 656(3) or 657(4) of ITTOIA 2005, so far as that income is treated under section 679 of that Act as paid from sums within section 680(4) of that Act ...
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) For the purposes of this section a person is treated as being entitled to a tax reduction under sections 2 and 6 of TIOPA 2010 if the person is entitled to credit against income tax under double taxation arrangements.
426 Election by donor: gift treated as made in previous tax year
(1) If—
(a) an individual makes a gift to a charity that is a qualifying donation, and
(b) the condition in subsection (2) is met,
the individual may elect to be treated as if the gift had been made in the previous tax year (“year P”).
(2) The condition is that the individual's charged amount for year P (see section 427) is at least equal to the increased total of gifts.
(3) If an election is made, sections 414 and 423 to 425 have effect in relation to the individual as if the gift were a qualifying donation made by the individual in year P.
(4) The increased total of gifts is the sum of—
(a) the grossed up amount of the gift, and of any gifts that are the subject of the same election or an election made at the same time,
(b) the sum of the grossed up amounts of any gifts to charities made by the individual in year P which—
(i) are qualifying donations, and
(ii) are not themselves treated as made in the tax year before year P because of an election under this section, and
(c) the sum of the grossed up amounts of any gifts which, as a result of an earlier election under this section, are treated as made in year P.
(5) The grossed up amount of the gifts mentioned in paragraphs (a) and (c) of subsection (4) is to be determined as if the gifts were made in year P.
(6) An election must be made—
(a) on or before the date on which the individual delivers a return for year P under section 8 of TMA 1970 (personal return), and
(b) not later than the normal self-assessment filing date for year P.
(7) An election does not affect the position of the recipient of the gift (see section 520 (gifts to charitable trusts: income tax treated as paid) and and sections 471 and 475 of CTA 2010 (charitable companies and eligible bodies: income tax treated as paid etc)).
(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) For the purposes of this Chapter, an individual's charged amount is the amount calculated as follows.
(2) Calculate the amount of the individual's modified net income for year X (see section 1025).
(3) Calculate the amount on which the individual is chargeable to capital gains tax for year X.
(4) Add together the amounts calculated under subsections (2) and (3).
The result is the individual's charged amount for year X.
(1) In this Chapter “gift aid declaration” means a declaration which—
(a) is given in the manner specified by regulations made by the Commissioners for Her Majesty's Revenue and Customs, and
(b) contains any information and any statements required by the regulations.
(2) The regulations may provide for declarations—
(a) to have effect,
(b) to cease to have effect, or
(c) to be treated as never having had effect,
in any circumstances and for any purposes specified by the regulations.
(3) The regulations may also require—
(a) charities, or intermediaries within the meaning of section 416(1A), to keep records with respect to declarations received from individuals or from those intermediaries,
(b) charities or intermediaries to produce, for inspection by an officer of Revenue and Customs, any records required to be kept by those charities or intermediaries by regulations made under paragraph (a), and
(c) intermediaries to provide statements of account, and other specified information relating to declarations made, in such form and at such times as may be specified, to individuals who have authorised those intermediaries to give those declarations to charities on their behalf.
(4) The regulations may also make different provision for different cases or circumstances, including—
(a) different provision for declarations made in a different manner or by different descriptions of persons, and
(b) different provision depending on whether or not an intermediary, within the meaning of section 416(1A), is involved in the giving or receiving of the declaration.
(5) The regulations may also make provision—
(a) for the imposition of a penalty of a specified amount (which must not exceed £3000) for a failure to comply with a specified requirement imposed by the regulations,
(b) for the assessment and recovery of the penalty (which may include provision about the reduction of the penalty in specified circumstances), and
(c) conferring a right of appeal against a decision that a penalty is payable.
(1) In this Chapter “charity” includes—
(a) the Trustees of the National Heritage Memorial Fund, and
(b) the Historic Buildings and Monuments Commission for England,
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) a club that is registered as a community amateur sports club for the purposes of Chapter 9 of Part 13 of CTA 2010.
(2) For the purposes of the application of section 414(1) in relation to clubs that are charities as a result of subsection (1)(d) of this section, membership fees are not gifts.
431 Relief for gifts of shares, securities and real property to charities etc
(1) An individual who disposes of the whole of the beneficial interest in a qualifying investment (see section 432) to a charity is entitled to relief if—
(a) the disposal is otherwise than by way of a bargain made at arm's length, and
(b) the individual makes a claim.
(2) The relief is given by deducting the relievable amount in calculating the individual's net income for the tax year in which the disposal is made (see Step 2 of the calculation in section 23).
(3) For the calculation of the relievable amount, see section 434.
(4) If the qualifying investment is a qualifying interest in land (see section 433), this section is subject to—
section 441 (certificates),
section 442 (qualifying interests in land held jointly),
section 443 (calculation of relievable amount where joint disposal), and
section 444 (disqualifying events).
(5) See section 446 for bodies that are treated as charities for the purposes of this Chapter.
(6) See subsection (7) of section 535 of ITTOIA 2005 (top slicing relief) for provision about how relief under this Chapter is to be ignored for the purpose of calculating relief under that section.
(7) This Chapter is subject to sections 809ZM and 809ZMB (removal of income tax relief in respect of tainted charity donations etc).
(1) In this Chapter “qualifying investment” means—
(a) shares or securities which are listed on a recognised stock exchange or dealt in on any designated market in the United Kingdom,
(b) units in an authorised unit trust,
(c) shares in an open-ended investment company,
(d) an interest in an offshore fund, and
(e) a qualifying interest in land.
(2) In this section—
“designated” means designated by an order made by the Commissioners for Her Majesty's Revenue and Customs for the purposes of subsection (1)(a),
“offshore fund” has the same meaning as in Chapter 5 of Part 17 of ICTA (see sections 756A to 756C of that Act), and
“open-ended investment company” is to be read in accordance with sections 613 and 615 of CTA 2010.
(3) An order under subsection (2) may—
(a) designate a market by name or by reference to any class or description of market, and
(b) vary or revoke a previous order under that subsection.
(1) In this Chapter “qualifying interest in land” means—
(a) a freehold interest in land in the United Kingdom, or
(b) a leasehold interest in land in the United Kingdom which is a term of years absolute.
This is subject to subsections (2) to (5).
(2) Subsection (3) applies if an individual with a beneficial interest in a freehold or leasehold interest mentioned in subsection (1)(a) or (b) makes a disposal to a charity of—
(a) the whole of the beneficial interest, and
(b) an easement, servitude, right or privilege so far as benefiting the land in question.
(3) The disposal mentioned in subsection (2)(b) is regarded for the purposes of this Chapter as a disposal by the individual of the whole of the individual's beneficial interest in a qualifying interest in land separate from the disposal mentioned in subsection (2)(a).
(4) If an individual who has a freehold or leasehold interest in land in the United Kingdom grants a lease for a term of years absolute to a charity of the whole or part of that land, the grant of the lease is regarded for the purposes of this Chapter as a disposal by the individual of the whole of the beneficial interest in the leasehold interest so granted.
(5) Neither an agreement to acquire a freehold interest nor an agreement for a lease is a qualifying interest in land.
(6) In the application of this section to Scotland—
(a) references to a freehold interest in land are to the interest of the owner,
(b) references to a leasehold interest in land which is a term of years absolute are to a tenant's right over or interest in a property subject to a lease,
(c) references to an agreement for a lease do not include missives of let that constitute an actual lease, and
(d) in subsection (4) the reference to granting a lease for a term of years absolute is to granting a lease.
(1) If the disposal is a gift, the relievable amount is given by the formula—
V
+
IC
-
B
where—
V is the value of the net benefit to the charity at, or immediately after, the time when the disposal is made, whichever is less,
IC is the amount of the incidental costs of making the disposal to the individual making it, and
B is the total value of any benefits received in consequence of making the disposal by the individual making the disposal or a person connected with the individual.
(2) If the disposal is at an undervalue, the relievable amount is given by the formula—
E
+
C
-
B
where—
E is the amount (if any) by which V (as defined in subsection (1)) exceeds the amount or value of the consideration for the disposal,
C is given by subsection (4), and
B is as defined in subsection (1).
(3) But if the amount given by the formula in subsection (1) or (2) is a negative amount, the relievable amount is nil.
(4) C is found by taking the following steps.
Step 1
Calculate the consideration for which the disposal is treated as made for the purposes of TCGA 1992 as a result of section 257(2)(a) of that Act (in case of disposal to charity etc, consideration to be such that no gain or loss accrues).
Step 2
Find the excess (if any) of the amount calculated at Step 1 over the amount or value of the consideration for the disposal.
If there is such an excess, C is the amount of that excess or, if less, the amount of the incidental costs of making the disposal to the individual making it.
If there is no such excess, C is nil.
(5) This section needs to be read with—
(a) section 435 (incidental costs of making disposal),
(b) section 436 (consideration), and
(c) sections 437 to 440 (value of net benefit to charity).
References in section 434 to the incidental costs of making the disposal to the individual making it are to—
(a) fees, commission or remuneration paid for the professional services of a surveyor, valuer, auctioneer, accountant, agent or legal adviser which are wholly and exclusively incurred by the individual for the purposes of the disposal,
(b) costs of transfer or conveyance wholly and exclusively incurred by the individual for the purposes of the disposal,
(c) costs of advertising to find a buyer, and
(d) costs reasonably incurred in making any valuation or apportionment required for the purposes of this Chapter.
(1) For the purposes of the formula in section 434(2) consideration for the disposal is brought into account—
(a) without any discount for postponement of the right to receive any part of it,
(b) in the first instance, without regard to a risk of any part of it being irrecoverable, and
(c) in the first instance, without regard to the right to receive any part of it being contingent.
(2) If—
(a) any part of the consideration so brought into account subsequently proves to be irrecoverable, and
(b) a claim is made,
such adjustment as is required in consequence must be made.
(3) An adjustment under subsection (2) may be made by way of discharge or repayment of tax or otherwise.
(1) For the purposes of this Chapter the value of the net benefit to a charity is—
(a) the relevant value of the qualifying investment, or
(b) if the charity is, or becomes, subject to a disposal-related obligation, the relevant value of the qualifying investment reduced by the total amount of the disposal-related liabilities of the charity.
(1A) In subsection (1) “relevant value” means—
(a) where subsection (1B) applies, the lower of the market value and the acquisition value, and
(b) otherwise, the market value.
(1B) This subsection applies where—
(a) the qualifying investment, or anything from which it derives or which it represents (whether in whole or in part and whether directly or indirectly), was acquired by the individual making the disposal within the period of 4 years ending with the day on which the disposal is made,
(b) the acquisition was made as part of a scheme, and
(c) the main purpose, or one of the main purposes, of the individual in entering into the scheme was to obtain relief, or an increased amount of relief, under this Chapter.
(1C) In subsection (1B) “scheme” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.
(2) This section is supplemented by—
section 438 (market value of qualifying investments),
section 438A (acquisition value of qualifying investments),
section 439 (meaning of “disposal-related obligation”), and
section 440 (meaning and amount of “disposal-related liability”).
(1) The market value of a qualifying investment for the purposes of this Chapter is determined in accordance with sections 272 to 274 of TCGA 1992 (subject to Part 1 of Schedule 11 to that Act).
(2) But, in the case of an interest in an offshore fund for which separate buying and selling prices are published regularly by the managers of the fund, the market value for the purposes of this Chapter is equal to the buying price (that is the lower price) published on—
(a) the day of the disposal, or
(b) if none were published on that day, on the latest day on which the prices were published before that day.
(1) For the purposes of this Chapter the acquisition value of a qualifying investment disposed of by an individual is—
(a) where the qualifying investment was acquired by the individual within the period of 4 years ending with the day on which the disposal is made, the cost to the individual of acquiring it, or
(b) where something from which the qualifying investment derives or which it represents was so acquired, such proportion of the cost to the individual of acquiring that thing as is just and reasonable to attribute to the qualifying investment.
(2) A reference in subsection (1) to the cost to the individual of an acquisition is to—
(a) the consideration given by the individual for the acquisition, less
(b) any amount that is received in connection with the acquisition, by the individual or a person connected with the individual, as part of the scheme in question.
(1) In this Chapter an obligation is a “disposal-related obligation”, in relation to a qualifying investment, if condition A or condition B is met in relation to it.
(2) The obligation may be to any person (whether or not the individual making the disposal or a person connected with the individual).
(3) Condition A is that it is reasonable to suppose that the disposal of the qualifying investment to the charity would not have been made in the absence of the obligation.
(4) Condition B is that the obligation (whether in whole or in part) relates to, is framed by reference to, or is conditional on the charity receiving, the qualifying investment or a disposal-related investment.
(5) In applying condition A, all the circumstances must be taken into account (including, in particular, the difference in the value of the net benefit to the charity calculated under section 437(1)(a) and that value calculated under section 437(1)(b)).
(6) In subsection (4) “disposal-related investment” means any of the following—
(a) an asset of the same class or description as the qualifying investment (irrespective of size, quantity or amount),
(b) an asset derived from, or representing, the qualifying investment, whether in whole or in part and whether directly or indirectly, and
(c) an asset from which the qualifying investment is derived, or which the qualifying investment represents, whether in whole or in part and whether directly or indirectly.
(7) In this Chapter “obligation” includes a reference to each of the following—
(a) a scheme, arrangement or understanding of any kind, whether or not legally enforceable, and
(b) a series of obligations (whether or not between the same parties).
440 Meaning and amount of “disposal-related liability”
(1) In this Chapter a liability is a “disposal-related liability” in the case of a qualifying investment if it is a liability of the charity under a disposal-related obligation in relation to the qualifying investment.
(2) If the disposal-related obligation is contingent, the amount to be brought into account for the purposes of section 437 at any time in respect of the disposal-related liability, so far as contingent, is—
(a) if the contingency occurs, the amount or value of the liability actually incurred in consequence of the occurrence of the contingency, or
(b) if the contingency does not occur, nil.
(1) This section applies if the qualifying investment is a qualifying interest in land.
(2) No individual may make a claim for relief under this Chapter unless the individual has received a certificate given by or on behalf of the charity.
(3) The certificate must—
(a) describe the qualifying interest in land,
(b) specify the date of the disposal, and
(c) state that the charity has acquired the qualifying interest in land.
(1) This section applies if the qualifying investment is a qualifying interest in land.
(2) It applies if two or more persons (“the owners”)—
(a) are jointly beneficially entitled to the qualifying interest in land, or
(b) are, taken together, beneficially entitled in common to the qualifying interest in land.
(3) Relief under this Chapter is available if—
(a) at least one of the owners is an individual, and
(b) all the owners dispose of the whole of their beneficial interests in the qualifying interest in land to the charity.
(4) Relief under this Chapter is available to each of the owners who is an individual.
(5) The amount of relief under this Chapter to be given to an individual is such share of the relievable amount as is allocated to the individual by an agreement made between those owners who are—
(a) individuals, or
(b) qualifying companies.
(6) A company is a qualifying company if—
(a) it is not itself a charity, and
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) If one or more of the owners is not an individual—
(a) for the purpose of determining whether the owners' beneficial interests are disposed of as mentioned in subsection (3)(b) of this section, subsections (2) to (4) of section 433 apply as if references to an individual included a reference to a person who is not an individual, and
(b) the total amount of relief given, because of the disposal of the qualifying interest in land, under this Chapter and as a result of Chapter 3 of Part 6 of CTA 2010 is not to exceed the relievable amount.
443 Calculation of relievable amount where joint disposal of interest in land
(1) This section applies for the purpose of calculating the relievable amount in a case where relief under this Chapter is available as a result of section 442(3).
(2) Calculate the relievable amount as if—
(a) the owners were a single individual, and
(b) the disposals of the owners' beneficial interests were a single disposal by that single individual of the whole of the beneficial interest in the qualifying interest in land.
(3) In particular, calculate the consideration mentioned at Step 1 in section 434(4) by—
(a) calculating, for each owner, the consideration for which the disposal of the owner's beneficial interest is treated as made for the purposes of TCGA 1992 as a result of section 257(2)(a) of that Act, and
(b) adding together all the consideration calculated under paragraph (a).
(4) Subsection (5) applies if one or more of the owners is neither—
(a) an individual, nor
(b) a qualifying company (see section 442(6)).
(5) In calculating the relievable amount make just and reasonable adjustments to reduce the relievable amount to reflect the fact that relief under this Chapter or as a result of Chapter 3 of Part 6 of CTA 2010 is not available to that owner or to those owners.
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) This section applies if the qualifying investment is a qualifying interest in land.
(2) If a disqualifying event occurs at any time in the provisional period, the following are treated as never having been entitled to relief under this Chapter in respect of the disposal of the qualifying interest in land—
(a) in a case to which section 442 does not apply, the individual who made the disposal, or
(b) in a case to which section 442 applies, each individual who is an owner.
(3) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (2).
(4) A disqualifying event occurs if a person mentioned in subsection (5) becomes, otherwise than for full consideration in money or money's worth—
(a) entitled to an interest or right in relation to all or part of the land to which the disposal relates, or
(b) party to an arrangement under which the person enjoys some right in relation to all or part of that land.
(5) The persons are—
(a) in a case to which section 442 does not apply—
(i) the individual who made the disposal, or
(ii) a person connected with that individual, and
(b) in a case to which section 442 applies—
(i) a person who is an owner, or
(ii) a person connected with such a person.
(6) A disqualifying event does not occur if a person becomes entitled to an interest or right as mentioned in subsection (4)(a) as a result of a disposition of property on death (whether the disposition is effected by will, under the law relating to intestacy or otherwise).
(7) “The provisional period” is the period beginning with the date of the disposal of the qualifying interest in land and ending with the fifth anniversary of the normal self-assessment filing date for the tax year in which the disposal was made.
(1) If a claim is made for relief under this Chapter in respect of a disposal—
(a) section 108 of ITTOIA 2005 (gifts of trading stock to charities etc) does not apply in relation to the disposal, and
(b) no relief in respect of the disposal is allowable under any other provision of the Income Tax Acts.
(2) For the effect on capital gains tax or corporation tax on chargeable gains where an individual is entitled to relief under this Chapter, see section 257(2A) to (2C) of TCGA 1992 (gifts to charities etc).
(1) This Chapter gives relief for some of the payments from which sums representing income tax must be deducted under Chapter 6 of Part 15 (deduction from annual payments and patent royalties).
(2) For the payments which attract relief, see sections 448 and 449.
(1) This section applies to a payment made in a tax year if—
(a) the person who makes it is an individual,
(b) a sum representing income tax is required by section 900(2) ... (deduction from annual payments ...) to be deducted from it, and
(c) the payment is not deductible in calculating the individual's income from any source.
(2) The individual is entitled to relief for the tax year equal to the gross amount of the payment.
(3) But this is subject to the restrictions in subsection (4) ....
(4) The total amount of relief given under this section to an individual for a tax year cannot be greater than the amount of the individual's modified net income for the tax year (see section 1025).
(5) The relief is given by deducting the amount of the relief in calculating the individual's net income for the tax year (see Step 2 of the calculation in section 23).
(1) This section applies to a payment made in a tax year if—
(a) the person who makes it is not an individual,
(b) a sum representing income tax is required by section 901(3) ... (deduction from annual payments ...) to be deducted from it, and
(c) the payment is not deductible in calculating the person's income from any source.
(2) The person who makes the payment is entitled to relief for the tax year equal to the gross amount of the payment.
(3) But this is subject to the restrictions in subsections (4) and (5)....
(4) Relief is not given for the payment so far as it is ineligible for relief (see section 450).
(5) The total amount of relief given under this section to a person for a tax year cannot be greater than the amount of the person's modified net income for the tax year (see section 1025).
(6) The relief is given by deducting the amount of the relief in calculating the person's net income for the tax year (see Step 2 of the calculation in section 23).
(1) This section sets out the circumstances in which a payment to which section 449 applies, or part of it, is ineligible for relief.
(2) The payment is ineligible for relief if, or so far as, it can lawfully be made only out of—
(a) capital, or
(b) income that is exempt from income tax.
(3) If the payment or any part of it is charged to capital, the payment or that part is ineligible for relief.
(4) If—
(a) the person who makes the payment treats it or any part of it as made out of income that is exempt from income tax, and
(b) the rights or obligations of any person are or may in the future be different from what they would have been if the payment or part had not been so treated,
the payment, or the part concerned, is ineligible for relief.
(5) If the payment or a part of it is not ultimately borne by the person who makes it, the payment or the part concerned is ineligible for relief.
(6) But subsection (5) does not apply to a payment or part of a payment if—
(a) the person who makes the payment is liable to income tax on an amount, and
(b) it is because the person receives that amount or benefits from it in some other way that the payment or the part concerned is not ultimately borne by that person.
References in this Chapter to the gross amount of a payment are to the amount of the payment before deduction of the sum representing income tax deductible from it under Chapter 6 of Part 15 (deduction from annual payments and patent royalties).