Income Tax Act 2007 section 553

Section 551: certain payments and benefits to be ignored

Section 553 provides that certain payments or benefits connected with charitable donations should be disregarded when applying the substantial donor rules, where those payments or benefits do not themselves disqualify the donations from tax relief.

• This section applies to payments or benefits that arise from transactions linked to gift aid donations by individuals or qualifying donations by companies.
• If such payments or benefits do not cause the underlying donation to lose its tax relief, they are to be ignored for the purposes of the substantial donor provisions in section 551.
• The effect is to prevent double jeopardy — a donor is not penalised under the substantial donor rules for receiving a benefit that is already permitted under the gift aid or qualifying donation rules.
• This provision was originally based on section 506B(7) of the Income and Corporation Taxes Act 1988 and was amended by Finance Act 2011.