Income Tax Act 2007 section 541

Attributing income to the non-exempt amount

Section 541 explains how a charitable trust's attributable income and attributable gains are allocated against its non-exempt amount for a tax year, and requires that the entire non-exempt amount must be fully used up.

• Where a charitable trust has a non-exempt amount for a tax year, attributable income may be attributed to it, but only to the extent the non-exempt amount has not already been used up
• The non-exempt amount can be used up by attributing income under this section, by attributing chargeable gains under section 256A of TCGA 1992, or by a combination of both
• The whole of the non-exempt amount must be fully exhausted — the trust cannot leave any portion unallocated
• Section 542 provides detailed rules on the method by which income is attributed to the non-exempt amount