Annex 1: Minor changes in the law Change 37: Charitable companies: exemption for income from estates in administration: sections 489, 490, 491, 492 and Schedule 1
This change provides an exemption to charitable companies which are liable to corporation tax on estate income charged under Chapter 3 of Part 10 of CTA 2009, to the extent that the income is applied to the purposes of the charitable company.
Estate income is income from property held by the personal representatives or administrators of the estate of a deceased person on behalf of the beneficiaries of the estate.
There is a long-standing HMRC practice of treating United Kingdom estate income received by charities as exempt, and of allowing repayment claims in such cases. This change puts this on an explicit statutory basis.
This exemption is also extended to the bodies listed in section 490 and to scientific research associations (see section 491) and is relevant to a number of entries in Schedule 1.
This change is in taxpayers’ favour in principle. But it is expected to have no practical effect as it is in line with generally accepted practice.