What is qualifying income under section 982 of the Corporation Tax Act 2010?

Qualifying income is non-trading income of a trade union or eligible employers' association that is both designated for and actually applied to provident benefits. Trading income does not qualify. Examples include investment income such as interest or rental income used to fund sickness payments or other provident benefit purposes.

What are qualifying gains under Corporation Tax Act 2010 section 982?

Qualifying gains are chargeable gains, such as gains on the disposal of investments, that are both designated for and actually applied to provident benefit purposes by a trade union or eligible employers' association. Both conditions must be satisfied for the gains to qualify for the corporation tax exemption under section 981.

What are provident benefits as defined by section 982 of the Corporation Tax Act 2010?

Provident benefits include payments authorised by union or association rules to members during sickness, personal injury, or unemployment, superannuation payments arising from age, sickness or incapacity, payments following accidents or loss of tools by fire or theft, funeral expense contributions on a member's or their spouse's or civil partner's death, and provision for deceased members' children.

Is the list of provident benefits in section 982 exhaustive?

No, the list is not exhaustive. The legislation states that provident benefits 'include' the specified payments, meaning other types of payment could also qualify provided they fall within the general concept of provident benefits. However, the listed categories clearly indicate the welfare and support payments Parliament intended to be covered by the exemption.

Corporation Tax Act 2010 section 982

Qualifying income or gains

Section 982 defines what counts as qualifying income and qualifying gains for the purposes of the corporation tax exemption available to trade unions and eligible employers' associations, and provides a detailed definition of provident benefits.

Qualifying income is non-trading income that is both designated for and actually spent on provident benefits; qualifying gains are chargeable gains similarly designated and applied for provident benefit purposes.
Provident benefits include payments authorised by the union's or association's rules to members during sickness, personal injury, unemployment, or for superannuation arising from age, sickness or incapacity, as well as payments following an accident or loss of tools by fire or theft.
Provident benefits also cover payments towards funeral expenses on the death of a member or the member's spouse or civil partner.
Payments made as provision for the children of a deceased member also fall within the definition of provident benefits.

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