Corporation Tax Act 2010 section 481

Exemption from charges under provisions to which section 1173 applies

Section 481 provides an exemption from corporation tax for certain miscellaneous income and gains of a charitable company, where that income or those gains are applied solely to the charity's purposes and certain conditions are met.

• Miscellaneous income and gains of a charitable company (as listed under section 1173) can be excluded from the total profits calculation, provided two conditions are satisfied: the income or gains relate to an accounting period meeting the trading and miscellaneous income threshold in section 482 (Condition A), and the income or gains are applied exclusively to the charitable company's purposes (Condition B).
• Certain types of income and gains are specifically excluded from this exemption, including chargeable payments connected with exempt distributions (under section 1086(2)) and any other categories specified by Treasury order.
• The exemption does not apply where the income or gains are already exempt from corporation tax under another provision — for example, post-cessation receipts from a primary purpose trade may already be exempt under section 478, and post-cessation receipts from a non-primary purpose trade may be exempt under section 480.
• The exemption is not automatic — the charitable company must make a formal claim to benefit from it.