Income Tax (Trading and Other Income) Act 2005 section 82

Deeply discounted securities: saving for charities' losses

Section 82 extends the loss relief rules for deeply discounted securities so that charities and charitable trusts can claim relief for losses in the same way as other trustees.

• The loss relief provisions in section 454(4) and (5) for deeply discounted securities apply not only to trustees but also to persons who would have qualified for charitable tax exemptions had the loss been a profit.
• The charitable exemptions in question are those under sections 521(4), 522(5), 523(5), 524, 529 to 533, 536, and 537 of the Income Tax Act 2007, which cover various types of charitable income such as gift aid receipts, charitable trading profits, fundraising event profits, and public revenue dividends.
• The saving also covers persons who would have qualified for those charitable exemptions but for the restriction in section 541 of the Income Tax Act 2007, which attributes certain income to a non-exempt amount.
• The effect is to ensure that charities are not disadvantaged by being unable to claim loss relief on deeply discounted securities simply because, as exempt bodies, they would not normally fall within the standard trustee loss relief rules.