J2. Loan to charity

INCOME TAX

Settlements legislation

- Loan to charity not treated as settlement

- A loan on beneficial terms is a settlement and the lender retains an interest.

- Definition of settlement excludes a loan of money made by an individual to a charity either for no consideration or for consideration that is purely interest (s.620(1)).

Legislation: ITTOIA s.620(1), s.620(5);

Cases:

HMRC manuals:

Commentary:

- Loan to subsidiary of charity

- The exclusion only applies to loan to a charity (s.620).

- Does not apply to loans to a company owned by a charity.

Legislation: