Corporation Tax Act 2010 section 478

Exemption for profits etc of charitable trades

Section 478 provides a corporation tax exemption for trading profits and post-cessation receipts of charitable companies, provided the funds are applied solely to the company's charitable purposes.

• Profits from a charitable trade carried on by a charitable company are exempt from corporation tax, as are post-cessation receipts arising from such a trade
• The exemption only applies where the profits or receipts are used exclusively for the charitable company's own purposes
• The trade must qualify as a "charitable trade" as defined separately in section 479, and exemptions for small-scale trades are dealt with in section 480
• The exemption is not automatic — it must be claimed by the charitable company