Income Tax Act 2007 section 437

Value of net benefit to charity

Section 437 explains how to calculate the value of the net benefit to a charity when a qualifying investment (such as shares, securities or real property) is disposed of to that charity, including anti-avoidance rules that may restrict the value used.

• The net benefit to the charity is normally the market value of the qualifying investment, but is reduced by any disposal-related liabilities if the charity has obligations connected with the disposal.
• An anti-avoidance rule applies where the individual acquired the investment (or something from which it derives) within four years before the disposal, as part of a scheme whose main purpose was to obtain or increase tax relief — in that case the relevant value is the lower of market value and acquisition value.
• "Scheme" is defined very broadly to include any arrangement or understanding of any kind, whether legally enforceable or not, and whether involving one transaction or several.
• Further detail on market value, acquisition value, disposal-related obligations and disposal-related liabilities is provided by sections 438, 438A, 439 and 440 respectively.