Income Tax Act 2007 section 531

Exemption for property income etc.

Section 531 provides an exemption from income tax for property income and certain trading income arising from land held in charitable trusts, provided the income is applied to charitable purposes.

• Trading income from land (such as rents or other receipts) that is charged under Part 2 of ITTOIA 2005 because of section 261 of that Act is exempt from income tax, provided the land is held in trust for a charity or charitable purposes
• Property income charged under Part 3 of ITTOIA 2005 is similarly exempt where it arises from land held in trust for a charity or charitable purposes — this includes adjustment income and post-cessation receipts from UK property businesses
• Distributions from Real Estate Investment Trusts (REITs) that are charged under Part 2 or Part 3 of ITTOIA 2005 are also exempt where the shares giving rise to the distributions are held in trust for a charity or charitable purposes
• All of these exemptions are conditional on the income being applied solely to charitable purposes — if only part of the income is used for charitable purposes, only that part qualifies for the exemption