Corporation Tax Act 2010 section 475

Gifts qualifying for gift aid relief: income tax treated as paid and exemption

Section 475 sets out how eligible bodies are treated for tax purposes when they receive gift aid donations from individuals, including the grossing-up mechanism and the exemption from inclusion in total profits.

• When an individual makes a qualifying gift aid donation to an eligible body, the body is treated as receiving a grossed-up amount equal to the gift before deduction of basic rate income tax
• The income tax notionally deducted from the grossed-up gift is treated as income tax actually paid by the eligible body, which it can reclaim from HMRC
• The grossed-up amount of the gift is exempt from the calculation of total profits, but this exemption must be claimed
• For eligible bodies that are charitable companies, these rules apply instead of the separate provisions in sections 471 and 472