Section 540 — Income Tax Act 2007: The non-exempt amount

The non-exempt amount 540 1 A charitable trust has a non-exempt amount for a tax year if it has—

a non-charitable expenditure for the tax year (amount A),

and b attributable income and gains for the tax year (amount B).

2 The non-exempt amount for the tax year is—

a amount A, or b if less, amount B.

3 For the purposes of this Part—

a a charitable trust's “attributable income” for a tax year is the charitable trust's income for the tax year that is exempt from income tax as a result of any of the exemptions under this Part, b a charitable trust's “attributable gains” for a tax year are any gains accruing to the charitable trust in the tax year that as a result of section 256(1) of TCGA 1992, are not chargeable gains, and c a charitable trust's “attributable income and gains” for a tax year is the sum of its attributable income for the tax year and its attributable gains for the tax year.

4 In applying subsection (3)(a) ignore any restrictions on the exemptions under this Part which result from section 539(2).

5 In applying subsection (3)(b) ignore any restriction on the exemption under section 256(1) of TCGA 1992 which results from section 256(4) of that Act.