Income Tax Act 2007 section 527

Exemption from charges under provisions to which section 1016 applies

Section 527 provides an income tax exemption for certain miscellaneous income and gains arising to a charitable trust, provided the income or gains are applied solely for the trust's charitable purposes and a trading and miscellaneous income threshold condition is met.

• Certain miscellaneous income and gains of a charitable trust (as defined by reference to section 1016) are excluded from total income if two conditions are satisfied: the section 528 income threshold condition is met (Condition A), and the income or gains are applied exclusively for the charitable trust's purposes (Condition B).
• The exemption does not cover income or gains taxable under specific provisions, including chargeable payments connected with exempt distributions (CTA 2010 s 1086(2)), gains from life insurance contracts (ITTOIA 2005 Part 4 Chapter 9), settlement income treated as the settlor's (ITTOIA 2005 Part 5 Chapter 5), or any other enactment specified by Treasury order.
• The exemption does not apply where the income or gains are already exempt from income tax under another provision — for example, trading income or interest exempt under other charitable trust sections such as sections 524, 526 or 532.
• Items that may qualify for this exemption include miscellaneous receipts not covered by other charitable exemptions, such as profits from the disposal of know-how or the sale of patent rights, provided both conditions are satisfied.