- Sale of donated goods not usually trading

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Normal sale not trading

- "Traders usually sell goods that they have manufactured, or have purchased for resale they do not usually receive goods by way of donation as charities do. For the charity the sale proceeds are simply a realisation of the value of a gift. For this reason the sale of donated goods is generally not regarded as a trade for tax purposes." (Guidance Annex iv, §17)

 

Significant work done may give rise to trading

- "This is so even where the donated items are sorted, cleaned and given minor repairs. If the goods are subjected to significant refurbishment or to any process which brings them into a different condition for sale purposes than that in which they were donated, the sale proceeds may be regarded as trading income. For example, where donated cloth is made into garments for sale this will amount to a trade." (Guidance Annex iv, §17)

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Legislation: 

Cases: 

HMRC manuals:

 Annex iv: trading and business activities — basic principles; 

Commentary: 

See also:

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