Section 515 | Excess expenditure treated as non-charitable expenditure of earlier periods

(1)This section applies if a charitable company's non-charitable expenditure for an accounting period exceeds its available income and gains for the period.

(2)The excess is the charitable company's “excess expenditure” for the accounting period.

(3)The charitable company's excess expenditure for the accounting period is treated for the purposes of this Part as non-charitable expenditure for earlier accounting periods so far as it can be attributed to earlier accounting periods under section 516.

(4)For the purposes of this Part a charitable company's “available income and gains” for an accounting period is the sum of—

(a)the amount in respect of which the charitable company is chargeable for the period under the charge to corporation tax on income after giving effect to any exemption under this Part,

(b)any chargeable gains accruing to the charitable company in the period,

(c)the charitable company's attributable income and gains for the period (see section 493), and

(d)any non-taxable sums received by the charitable company in the period.

(5)In subsection (4) “non-taxable sums” means donations ... and other sums of a similar nature which, ignoring exemptions from corporation tax under this Part and under section 256 of TCGA 1992, are not liable to corporation tax.

(6)Any restrictions on the exemptions under this Part which result from sections 492(2) and 494 are to be ignored in calculating the amount mentioned in subsection (4)(a).

(7)Any restriction on the exemption under section 256(1) of TCGA 1992 which results from section 256(4) of that Act is to be ignored in calculating the amount of any chargeable gains to be taken into account in accordance with subsection (4)(b).