Income Tax Act 2007 section 518

Overview of Part

Section 518 provides an overview and roadmap of the special income tax rules that apply to charitable trusts, covering the tax treatment of gifts and payments received, income exemptions available, and the restrictions that may limit those exemptions.

• Gifts and payments made to charitable trusts may trigger income tax charges, but specific exemptions from those charges are also available
• Various types of income received by charitable trusts can be exempt from income tax, with the exemptions following the order in which income types appear in the tax legislation
• Where a charitable trust has a "non-exempt amount" for a tax year — determined by its attributable income, gains, and non-charitable expenditure — the available exemptions are restricted
• Exemptions must be formally claimed, and references to a charitable trust's total income mean the total income of the trustees of that trust