Income Tax Act 2007 section 524

Exemption for profits etc. of charitable trades

Section 524 provides an income tax exemption for trading profits and certain related income of charitable trusts, provided the trade qualifies as a charitable trade and the income is used solely for the trust's charitable purposes.

• Trading profits, adjustment income and post-cessation receipts of a charitable trust can be excluded from total income if two conditions are satisfied
• Condition A requires that the trade qualifies as a "charitable trade" in the relevant tax year — or, for post-cessation receipts, that it was a charitable trade when the trade ceased
• Condition B requires that the profits or receipts are applied exclusively to the purposes of the charitable trust
• The definition of a "charitable trade" for these purposes is set out separately in section 525, and a separate exemption for small-scale trades is dealt with in section 526