Corporation Tax Act 2010 section 488

Exemption for certain miscellaneous income

Section 488 provides a corporation tax exemption for certain categories of miscellaneous income received by charities, provided the income is applied to charitable purposes and a claim is made.

• Three types of income qualify for the exemption: non-trading gains on intangible fixed assets, annual payments charged to tax under CTA 2009, and qualifying income from intangible fixed assets that are pre-Finance Act 2002 assets.
• The exemption applies only to income of a charitable company, or income that is legally required (by statute, court judgment, charter, trust deed or will) to be used solely for charitable purposes.
• The exemption only applies to the extent that the income is actually applied to charitable purposes, and a formal claim must be made to obtain the relief.
• The qualifying income category for pre-Finance Act 2002 intangible fixed assets is limited to income that would have been non-trading credits if the assets were not pre-FA 2002 assets, and only covers income not already exempt under one of the other two categories.