Finance Bill

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Session 2009 - 10
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Finance Bill

Finance Bill
Schedule 8 — Gifts of shares etc to charities
101

Schedule 8
Section 32

Gifts of shares etc to charities
Gifts by individuals
1
Chapter 3 of Part 8 of ITA 2007 (relief for gifts by individuals of shares,
securities and real property to charities etc) is amended as follows.
5
2     (1)
Section 437 (value of net benefit to charity) is amended as follows.
      (2)
In subsection (1), for “market” (in both places) substitute “relevant”.
      (3)
After that subsection insert—
“(1A)
In subsection (1) “relevant value” means—
(a)
where subsection (1B) applies, the lower of the market value
10
and the acquisition value, and
(b)
otherwise, the market value.
(1B)
This subsection applies where—
(a)
the qualifying investment, or anything from which it derives
or which it represents (whether in whole or in part and
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whether directly or indirectly), was acquired by the
individual making the disposal within the period of 4 years
ending with the day on which the disposal is made,
(b)
the acquisition was made as part of a scheme, and
(c)
the main purpose, or one of the main purposes, of the
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individual in entering into the scheme was to obtain relief, or
an increased amount of relief, under this Chapter.
(1C)
In subsection (1B) “scheme” includes any scheme, arrangement or
understanding of any kind, whether or not legally enforceable,
involving a single transaction or two or more transactions.”
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      (4)
In subsection (2), after the entry relating to section 438 insert—
“section 438A (acquisition value of qualifying investments),”.
3
After section 438 insert—
“438A
Acquisition value of qualifying investments
(1)
For the purposes of this Chapter the acquisition value of a qualifying
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investment disposed of by an individual is—
(a)
where the qualifying investment was acquired by the
individual within the period of 4 years ending with the day
on which the disposal is made, the cost to the individual of
acquiring it, or
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(b)
where something from which the qualifying investment
derives or which it represents was so acquired, such
proportion of the cost to the individual of acquiring that
thing as is just and reasonable to attribute to the qualifying
investment.
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(2)
A reference in subsection (1) to the cost to the individual of an
acquisition is to—

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Schedule 8 — Gifts of shares etc to charities
102

(a)
the consideration given by the individual for the acquisition,
less
(b)
any amount that is received in connection with the
acquisition, by the individual or a person connected with the
individual, as part of the scheme in question.”
5
4
In Schedule 4 to ITA 2007 (index of defined expressions), after the entry
relating to accumulated or discretionary income insert—

“acquisition value of a qualifying
section 438A”.

investment (in Chapter 3 of Part 8)

Gifts by companies
10
5
Chapter 3 of Part 6 of CTA 2010 (charitable donations relief: amounts treated
as qualifying charitable donations) is amended as follows.
6     (1)
Section 209 (value of net benefit to charity) is amended as follows.
      (2)
In subsection (1), for “market” (in both places) substitute “relevant”.
      (3)
After that subsection insert—
15
“(1A)
In subsection (1) “relevant value” means—
(a)
where subsection (1B) applies, the lower of the market value
and the acquisition value, and
(b)
otherwise, the market value.
(1B)
This subsection applies where—
20
(a)
the qualifying investment, or anything from which it derives
or which it represents (whether in whole or in part and
whether directly or indirectly), was acquired by the company
making the disposal within the period of 4 years ending with
the day on which the disposal is made,
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(b)
the acquisition was made as part of a scheme, and
(c)
the main purpose, or one of the main purposes, of the
company in entering into the scheme was to obtain relief, or
an increased amount of relief, as a result of this Chapter.
(1C)
In subsection (1B) “scheme” includes any scheme, arrangement or
30
understanding of any kind, whether or not legally enforceable,
involving a single transaction or two or more transactions.”
      (4)
In subsection (2), after paragraph (a) insert—
“(aa)
section 210A (acquisition value of qualifying investments),”.
7
After section 210 insert—
35
“210A
Acquisition value of qualifying investments
(1)
For the purposes of this Chapter the acquisition value of a qualifying
investment disposed of by a company is—
(a)
where the qualifying investment was acquired by the
company within the period of 4 years ending with the day on
40
which the disposal is made, the cost to the company of
acquiring it, or

Finance Bill
Schedule 9 — Charities: miscellaneous amendments
103

(b)
where something from which the qualifying investment
derives or which it represents was so acquired, such
proportion of the cost to the company of acquiring that thing
as is just and reasonable to attribute to the qualifying
investment.
5
(2)
A reference in subsection (1) to the cost to the company of an
acquisition is to—
(a)
the consideration given by the company for the acquisition,
less
(b)
any amount that is received in connection with the
10
acquisition, by the company or a person connected with it, as
part of the scheme in question.”
8
In Schedule 4 to CTA 2010 (index of defined expressions), after the entry
relating to accounts (in Chapter 2 of Part 16) insert—

“acquisition value of a qualifying
section 210A”.

15

investment (in Chapter 3 of Part 6)

Commencement and corresponding ICTA amendments
9
The amendments made by this Schedule have effect in relation to any
disposal made to a charity on or after 15 December 2009.
10
Amendments corresponding to the ones made by paragraphs 6 and 7,
20
having effect in relation to any such disposal, are to be treated as having
been made in section 587B of ICTA.
Schedule 9
Section 33

Charities: miscellaneous amendments
Payroll giving
25
1     (1)
In ITA 2007, after section 521 insert—
“521A
Gifts under payroll deduction schemes: income tax liability and
exemption
(1)
This section applies if gifts are made to charitable trusts by
individuals and the gifts are donations for the purposes of Part 12 of
30
ITEPA 2003 (payroll giving).
(2)
Income tax is charged on the gifts under this section.
(3)
It is charged on the full amount of the gifts arising in the tax year.
(4)
But a gift is not taken into account in calculating total income so far
as it is applied to charitable purposes only.
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(5)
The trustees of the charitable trust are liable for any tax charged
under this section.”

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Schedule 9 — Charities: miscellaneous amendments
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      (2)
In CTA 2010, after section 472 insert—
“472A
Gifts under payroll deduction schemes: corporation tax liability and
exemption
(1)
If a charitable company receives a gift from an individual and the gift
is a donation for the purposes of Part 12 of ITEPA 2003 (payroll
5
giving), the gift is treated as an amount in respect of which the
charitable company is chargeable to corporation tax, under the
charge to corporation tax on income.
(2)
But the gift is not taken into account in calculating total profits so far
as it is applied to charitable purposes only.
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(3)
The exemption under subsection (2) requires a claim.”
Payments to bodies outside the UK: non-charitable expenditure
2     (1)
In section 547(b) of ITA 2007 (payments by charitable trusts to bodies outside
the UK), after “such steps as” insert “the Commissioners for Her Majesty’s
Revenue and Customs consider”.
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      (2)
In section 500(b) of CTA 2010 (payments by charitable companies to bodies
outside the UK), after “such steps as” insert “the Commissioners for Her
Majesty’s Revenue and Customs consider”.
Gift aid: disqualified overseas gifts
3     (1)
Chapter 2 of Part 8 of ITA 2007 (gift aid) is amended as follows.
20
      (2)
In section 416 (meaning of “qualifying donation”)—
(a)
in subsection (1)(a) for “G” substitute “F”, and
(b)
omit subsection (8).
      (3)
Omit section 422 (disqualified overseas gifts).
      (4)
In section 429(3) (giving through self-assessment return), for “G” substitute
25
“F”.
Gift aid administration: charitable trusts
4     (1)
Section 42 of TMA 1970 (procedure for making claims etc) is amended as
follows.
      (2)
In subsection (2), for “(3A)” substitute “(3ZA)”.
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      (3)
After subsection (3) insert—
“(3ZA)
Subsection (2) above shall not apply in relation to any claim by the
trustees of a charitable trust for an amount to be exempt from tax by
virtue of section 521(4) of ITA 2007 (gifts entitling donor to gift aid
relief: charitable trusts).”
35
5     (1)
ITA 2007 is amended as follows.
      (2)
In section 518(4) (overview of Part 10), for “section 538” substitute “sections
538 and 538A”.

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      (3)
After section 538 insert—
“538A
Claims in relation to gift aid relief
(1)
This section applies to claims for amounts to be exempt from tax by
virtue of section 521(4) (gifts entitling donor to gift aid relief:
charitable trusts).
5
(2)
A claim to which this section applies may be made—
(a)
to an officer of Revenue and Customs, or
(b)
by being included in a return under section 8A of TMA 1970
(trustee’s self-assessment return).
(3)
In this section—
10
“free-standing claim” means a claim made as mentioned in
subsection (2)(a), and
“tax return claim” means a claim made as mentioned in
subsection (2)(b).
(4)
The Commissioners for Her Majesty’s Revenue and Customs may by
15
regulations make provision—
(a)
limiting the number of free-standing claims that may be
made by a person in a tax year, or
(b)
requiring a claim for an amount below an amount specified
in the regulations to be made as a tax return claim.
20
(5)
The regulations may make different provision for different cases or
purposes.”
Gift aid administration: charitable companies
6     (1)
Schedule 18 to FA 1998 (company tax returns, assessments and related
matters) is amended as follows.
25
      (2)
In paragraph 9 (claims that cannot be made without a return), after sub-
paragraph (2) insert—
   “(2A)
But this paragraph does not apply to a claim by a company for an
amount to be exempt from tax by virtue of—
(a)
section 472 of CTA 2010 (gifts qualifying for gift aid relief:
30
charitable companies), or
(b)
section 475 of that Act (gifts qualifying for gift aid relief:
eligible bodies).”
      (3)
In paragraph 57 (claims or elections affecting a single accounting period),
after sub-paragraph (1) insert—
35
   “(1A)
But this paragraph does not apply to a claim by a company for an
amount to be exempt from tax by virtue of—
(a)
section 472 of CTA 2010 (gifts qualifying for gift aid relief:
charitable companies), or
(b)
section 475 of that Act (gifts qualifying for gift aid relief:
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eligible bodies).”

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Schedule 9 — Charities: miscellaneous amendments
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7
In CTA 2010, after section 477 insert—
“Claims
477A
Claims in relation to gift aid relief
(1)
This section applies to claims for amounts to be exempt from tax by
virtue of—
5
(a)
section 472 (gifts qualifying for gift aid relief: charitable
companies), or
(b)
section 475 (gifts qualifying for gift aid relief: eligible bodies).
(2)
A claim to which this section applies may be made—
(a)
to an officer of Revenue and Customs, or
10
(b)
where the claimant is a company, by being included in the
claimant’s company tax return.
(3)
In this section—
“free-standing claim” means a claim made as mentioned in
subsection (2)(a), and
15
“tax return claim” means a claim made as mentioned in
subsection (2)(b).
(4)
The Commissioners for Her Majesty’s Revenue and Customs may by
regulations make provision—
(a)
limiting the number of free-standing claims that may be
20
made by a person in a tax year, or
(b)
requiring a claim for an amount below an amount specified
in the regulations to be made as a tax return claim.
(5)
The regulations may make different provision for different cases or
purposes.”
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Commencement
8     (1)
The amendments made by paragraph 1 have effect in relation to gifts made
on or after 24 March 2010.
      (2)
An amendment corresponding to that made by paragraph 1(2), having effect
in relation to gifts made on or after that date, is to be treated as having been
30
made in ICTA.
      (3)
The amendments made by paragraph 2 have effect in relation to payments
representing expenditure incurred on or after 24 March.
      (4)
An amendment corresponding to that made by paragraph 2(2), having effect
in relation to payments representing expenditure incurred on or after that
35
date, is to be treated as having been made in ICTA.
      (5)
The amendments made by paragraph 3 have effect in relation to gifts made
on or after 6 April 2010.
      (6)
The amendments made by paragraphs 4 and 6 have effect in relation to
claims whenever made.
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