Corporation Tax Act 2010 section 661D

Tax treatment of gifts qualifying for gift aid relief

Section 661D sets out how gift aid donations made by individuals to community amateur sports clubs (CASCs) are treated for tax purposes, including the grossing up mechanism and the corporation tax charge on the grossed up amount.

• When an individual makes a gift aid donation to a registered CASC, the club is treated as receiving the grossed up amount of the gift, with income tax at the basic rate treated as already deducted.
• The income tax treated as deducted is regarded as income tax paid by the club, which the club can reclaim from HMRC.
• The grossed up amount of the donation is chargeable to corporation tax on income in the club's hands.
• However, the donation is exempt from corporation tax under section 664, provided it is applied for qualifying purposes.