Corporation Tax Act 2010 section 194

Distributions

Section 194 prevents payments that are treated as distributions from qualifying as charitable donations eligible for tax relief, with a limited exception for payments made by companies wholly owned by a charity.

• A payment that is treated as a distribution under any provision of the Taxes Acts is disqualified from being a qualifying charitable donation.
• The one exception to this disqualification is where a distribution arises under section 1020, which deals with transfers of assets or liabilities treated as distributions.
• A non-dividend payment made by a company that is wholly owned by a charity is not treated as a distribution for these purposes, so it can still qualify.
• Dividends paid by a charity-owned company remain distributions and are therefore disqualified under this section.