Section 523 | Payments from other charities: income tax liability and exemption

(1)This section applies to payments which—

(a)are received by charitable trusts from other charities,

(b)are not made for full consideration in money or money's worth,

(c)are not charged to income tax, apart from this section, and

(d)are not of a description which (on a claim) would be exempt from income tax under any of the exemptions conferred by this Part.

(2)This section does not apply to a payment which arises from a source outside the United Kingdom.

(3)Income tax is charged under this section on the payments.

(4)It is charged on the full amount of the payments arising in the tax year.

(5)But a payment is not taken into account in calculating total income so far as it is applied to charitable purposes only.

(6)The amount charged under this section in the case of certain payments made by the trustees of a charitable trust in the exercise of a discretion is subject to section 494 (grossing up of discretionary payments from trusts).

(7)The trustees of the charitable trust are liable for any tax charged under this section.