Corporation Tax Act 2010 section 484

Exemption for profits from lotteries

Section 484 provides a corporation tax exemption for profits that a charitable company earns from running a lottery, provided the lottery is lawfully conducted and the profits are used solely for the charity's purposes.

• Profits from a lottery run by a charitable company can be excluded from total profits for corporation tax purposes, but only if two conditions are satisfied and a claim is made.
• The lottery must be lawful — either qualifying as an exempt lottery under Parts 1 or 4 of Schedule 11 to the Gambling Act 2005, operated under a lottery operating licence under Part 5 of the same Act, or conducted in accordance with the equivalent Northern Ireland legislation.
• All profits from the lottery must be applied exclusively to the charitable purposes of the company.
• The exemption is not automatic — the charitable company must submit a claim to HMRC in order to benefit from it.