587B. Gifts of shares, securities and real property to charities etc

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(1) Subsections (2) and (3) below apply where, otherwise than by way of a bargain made at arm's length, an individual, or a company which is not itself a charity, disposes of the whole of the beneficial interest in a qualifying investment to a charity.
(2) On a claim made in that behalf to an officer of the Board

      (a) the relevant amount shall be allowed;

        (i) in the case of a disposal by an individual, as a deduction in calculating his total income for the purposes of income tax for the year of assessment in which the disposal is made
        (ii) in the case of a disposal by a company, as a charge on income for the purposes of corporation tax for the accounting period in which the disposal is made

      (b) no relief in respect of the disposal shall be given under section 83A [of this Act, section 108 of ITTOIA 2005] or any other provision of the Income Tax Acts

but paragraph (a)(i) above shall not apply for the purposes of any computation under sections 535 to 537 of ITTOIA 2005.

(3) The consideration for which the charity's acquisition of the qualifying investment is treated by virtue of section 257(2) of the 1992 Act as having been made

      (a) shall be reduced by the relevant amount
      (b) where that consideration is less than that amount, shall be reduced to nil.

(4) Subject to subsections (5) to (7) below, the relevant amount is an amount equal to

      (a) where the disposal is a gift, the value of the net benefit to the charity at, or immediately after, the time when the disposal is made - whichever time gives the lower value;
      (b) where the disposal is at an undervalue, the amount by which;
      (i) the value described in paragraph (a) above, exceeds
      (ii) the amount or value of the consideration for the disposal,
      or, if there is no such excess, nil.

(5) Where there are one or more benefits received in consequence of making the disposal which are received by the person, the company, making the disposal or a person connected with him, it, the relevant amount shall be reduced by the value of that benefit or, as the case may be, the aggregate value of those benefits; and section 839 applies for the purposes of this subsection.

(6) Where the disposal is a gift, the relevant amount shall be increased by the amount of the incidental costs of making the disposal to the person, company, making it.

(7) Where the disposal is at an undervalue;

      (a) to the extent that the consideration for the disposal is less than that for which the disposal is treated as made by virtue of section 257(2)(a) of the 1992 Act, the relevant amount shall be increased by the amount of the incidental costs of making the disposal to the person, company, making it
      (b) section 48 of that Act - consideration due after time of disposal, shall apply in relation to the computation of the relevant amount as it applies in relation to the computation of a gain.

(8) ...

(8A) The value of the net benefit to the charity is

      (a) the market value of the qualifying investment, unless subsection (8B) below applies
      (b) where that subsection applies, that market value reduced by the aggregate amount of the related liabilities of the charity - see subsections (8E) to (8G).

(8B) This subsection applies in any case where;

      (a) the charity is, or becomes, subject to an obligation to any person, whether or not the person, the company, making the disposal or a person connected with him,it.
      (b) one or more of the conditions in subsection (8C) below is satisfied.

(8C) For the purposes of subsection (8B) above

      (a) condition 1 is that, taking into account all the circumstances - including, in particular, the difference in the value of the net benefit to the charity if subsection (8B) applies and if it does not, it is reasonable to suppose that the disposal of the qualifying investment to the charity would not have been made in the absence of the obligation
      (b) condition 2 is that the obligation (whether in whole or in part) relates to, is framed by reference to, or is conditional on the charity receiving, the qualifying investment or a related investment - see subsection (8D).
(8D) In subsection (8C) above 'related investment' means any of the following
      (a) any asset of the same class or description as the qualifying investment, irrespective of size, quantity or amount.
      (b) any asset derived from, or representing, the qualifying investment whether in whole or in part and whether directly or indirectly
      (c) any asset from which the qualifying investment is derived, or which the qualifying investment represents, whether in whole or in part and whether directly or indirectly.

(8E) For the purposes of this section, the liabilities which are related liabilities in the case of any qualifying investment are the liabilities of the charity under each of the obligations that fall within subsection (8B) above ,as read with subsection (8C) above, in relation to that investment.

(8F) Where an obligation is contingent and the contingency occurs, the amount to be brought into account for the purposes of this section at any time in respect of the liability, so far as contingent, under the obligation is the amount or value of the liability actually incurred in consequence of the occurrence of the contingency.

(8G) Where an obligation is contingent and the contingency does not occur, the amount to be brought into account for the purposes of this section at any time in respect of the liability, so far as contingent, is nil.

(9) In this section;
'authorised unit trust' and 'open-ended investment company' have the meanings given by section 468;

'authorised unit trust' has the meaning given by section 468;

'charity' has the same meaning as in section 506 and includes each of the bodies mentioned in section 507(1)

      (a) the Trustees of the National Heritage Memorial Fund
      (b) the Historic Buildings and Monuments Commission for England
      (c) the National Endowment for Science, Technology and the Arts

'the incidental costs of making the disposal to the person, company, making it' shall be construed in accordance with section 38(2) of the 1992 Act;

'obligation' includes a reference to each of the following

      (a) any scheme, arrangement or understanding of any kind, whether or not legally enforceable
      (b) a series of obligations, whether or not between the same parties;

“open-ended investment company” is to be read in accordance with section 468A(2) to (4);

'qualifying investment' means any of the following

      (a) shares or securities which are listed, on a recognised stock exchange or dealt in on any designated market in the United Kingdom
      (b) units in an authorised unit trust
      (c) shares in an open-ended investment company
      (d) an interest in an offshore fund
      (e) a qualifying interest in land

'related liabilities' shall be construed in accordance with subsection (8E) above

'value of the net benefit to the charity' shall be construed in accordance with subsection (8A) above.

(9ZA) In paragraph (a) of the definition of 'qualifying investment' in subsection (9) above, 'designated' means designated by an order made by the Commissioners for Her Majesty's Revenue and Customs for the purposes of that paragraph.

(9ZB) An order under subsection (9ZA) above may

      (a) designate a market by name or by reference to any class or description of market
      (b) vary or revoke a previous order under that subsection.

[(9A) In this section a 'qualifying interest in land' means

      (a) a freehold interest in land
      (b) a leasehold interest in land which is a term of years absolute,
      where the land in question is in the United Kingdom.

This subsection is subject to subsections (9B) to (9D) below.


'charity' has the same meaning as in section 506 and includes each of the bodies mentioned in section 507(1)

      (a) the Trustees of the National Heritage Memorial Fund
      (b) the Historic Buildings and Monuments Commission for England
      (c) the National Endowment for Science, Technology and the Arts

'the incidental costs of making the disposal to the person, company, making it' shall be construed in accordance with section 38(2) of the 1992 Act;

'obligation' includes a reference to each of the following

      (a) any scheme, arrangement or understanding of any kind, whether or not legally enforceable
      (b) a series of obligations, whether or not between the same parties;
“offshore fund” has the same meaning as in Chapter 5 of Part 17;

“open-ended investment company” is to be read in accordance with section 468A(2) to (4);

'qualifying investment' means any of the following

      (a) shares or securities which are listed, on a recognised stock exchange or dealt in on any designated market in the United Kingdom
      (b) units in an authorised unit trust
      (c) shares in an open-ended investment company
      (d) an interest in an offshore fund
      (e) a qualifying interest in land

'related liabilities' shall be construed in accordance with subsection (8E) above

'value of the net benefit to the charity' shall be construed in accordance with subsection (8A) above.

(9ZA) In paragraph (a) of the definition of 'qualifying investment' in subsection (9) above, 'designated' means designated by an order made by the Commissioners for Her Majesty's Revenue and Customs for the purposes of that paragraph.

(9ZB) An order under subsection (9ZA) above may

      (a) designate a market by name or by reference to any class or description of market
      (b) vary or revoke a previous order under that sub ars absolute,
      where the land in question is in the United Kingdom.

This subsection is subject to subsections (9B) to (9D) below.

(9B) Where a person, company, makes a disposal to a charity of

      (a) the whole of his,its, beneficial interest in such freehold or leasehold interest in land as is described in subsection (9A)(a) or (b) above
      (b) any easement, servitude, right or privilege so far as benefiting that land, the disposal falling within paragraph (b) above is to be regarded for the purposes of this section as a disposal by the person [company] of the whole of his [its] beneficial interest in a qualifying interest in land.

(9C) Where a person who, a company, which, has a freehold or leasehold interest in land in the United Kingdom grants a lease for a term of years absolute ,or, in the case of land in Scotland, grants a lease, to a charity of the whole or part of that land, the grant of that lease is to be regarded for the purposes of this section as a disposal by the person, the company, of the whole of the beneficial interest in the leasehold interest so granted.

(9D) For the purposes of subsection (9A) above, an agreement to acquire a freehold interest and an agreement for a lease are not qualifying interests in land.

(9E) In the application of this section to Scotland

      (a) references to a freehold interest in land are references to the interest of the owner
      (b) references to a leasehold interest in land which is a term of years absolute are references to a tenant's right over or interest in a property subject to a lease
      (c) references to an agreement for a lease do not include references to missives of let that constitute an actual lease.

(10) Subject to subsection (11) below, the market value of any qualifying investment shall be determined for the purposes of this section as for the purposes of the 1992 Act.

[(10A) Section 839, connected persons, applies for the purposes of this section.

(11) In the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 272(5) of the 1992 Act, meaning of 'market value' in relation to rights of unit holders in a unit trust scheme, shall apply with any necessary modifications for determining the market value of the interest for the purposes of this section.]

[(12) This section is supplemented by section 587C - sections 587BA and 587C below.

587BA Qualifying interests in land held jointly
(1) This section applies for the purposes of section 587B where a qualifying investment is a qualifying interest in land.

(2) Where two or more persons 'the owners'

      (a) are jointly beneficially entitled to the qualifying interest in land
      (b) are, taken together, beneficially entitled in common to the qualifying interest in land
relief under section 587B is available if at least one of the owners is a qualifying company and all the owners dispose of the whole of their beneficial interests in the qualifying interest in land to the charity.

(3) Subsection (4) applies if one or more of the owners is not a company.

(4) For the purpose of determining whether the owners' beneficial interests are disposed of as mentioned in subsection (2), section 587B(9B) and (9C) applies as if references to a company included a reference to a person who is not a company.

(5) Relief under section 587B is available to each of the owners which is a qualifying company.

(6) If one or more of the owners is an individual

      (a) the relevant amount is taken to be the relievable amount calculated for the purposes of Chapter 3 of Part 8 of ITA 2007
      (b) the amount of relief under section 587B to be given to a qualifying company is such share of the relievable amount as is allocated to the company by the agreement mentioned in section 442(5) of ITA 2007

(7) Subsections (8) to (12) apply if none of the owners is an individual.

(8) The amount of relief under section 587B to be given to a qualifying company is such share of the relevant amount as is allocated to the company by an agreement made between those owners which are qualifying companies.

(9) Calculate the relevant amount as if;

      (a) the owners were a single qualifying company
      (b) the disposals of the owners' beneficial interests were a single disposal by that single company of the whole of the beneficial interest in the qualifying interest in land

(10) In particular, for the purposes of section 587B(7) calculate the consideration for which the disposal is made by virtue of section 257(2)(a) of the 1992 Act by;

      (a) calculating, for each owner, the consideration for which the disposal of the owner's beneficial interest is so made
      (b) adding together all the consideration calculated under paragraph (a).

(11) If one or more of the owners is not a qualifying company, in calculating the relevant amount make just and reasonable adjustments to reduce the relevant amount to reflect the fact that relief under section 587B is not available to that owner or to those owners.

(12) . . .

(13) A company is a qualifying company if;

      (a) it is not itself a charity, . . .
      (b) . . ..]