Income Tax Act 2007 section 536

Exemption for certain miscellaneous income

Section 536 provides an exemption from income tax for certain categories of miscellaneous income received by charities, provided the income is applied exclusively to charitable purposes.

• Certain miscellaneous income of charitable trusts, or income required by law, court order, charter, trust deed or will to be used for charitable purposes, is exempt from income tax.
• The exemption only applies to the extent that the income is actually used for charitable purposes.
• The types of income covered include royalties and other intellectual property income, income from telecommunication rights, annual payments, and relevant foreign distributions — but only where these are not already taxed as trade receipts.
• A relevant foreign distribution is one from a non-UK resident company that is not taxable as a foreign dividend but would have been taxable as a UK dividend had the company been UK resident.