ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL This change is in taxpayers’ favour in principle. But it is expected to have no practical effect as it is in line with current practice. Change 93: Charitable trusts: mixed trades: requiring an apportionment to be just and reasonable: section 525
This change requires apportionment of expenses etc of a mixed trade, between the deemed charitable trade and the deemed other trade, to be “just” as well as “reasonable”.
The source legislation in section 505(1B) of ICTA, as inserted by section 56 of FA 2006, requires such apportionments to be “reasonable”. All other apportionments under this Act are required to be “just and reasonable”. There is no reason why an apportionment should not be on a just and reasonable basis. And it is desirable that all apportionments should be made on the same basis.
Accordingly, section 525(4) requires a just and reasonable apportionment to be made where the source legislation requires the apportionment to be made on a reasonable basis.
The same change was made in ITTOIA, to provide a uniform expression of the basis on which apportionments are to be made.