(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, legacies 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).
(1)The rules in this section apply for attributing a charitable company's excess expenditure for an accounting period to earlier accounting periods under section 515.
(2)The excess expenditure for an accounting period may be attributed to an earlier accounting period if—
(a)the earlier period ends not more than 6 years before the end of the period in question, and
(b)the charitable company's available income and gains for the earlier period exceed its non-charitable expenditure for the earlier period.
(3)If the conditions in subsection (2) are met in the case of more than one earlier accounting period, the excess expenditure is to be attributed to a later accounting period in priority to an earlier accounting period.
(4)The amount of excess expenditure that is to be attributed to an earlier accounting period must not be greater than the amount by which the charitable company's available income and gains for the earlier period exceed its non-charitable expenditure for the earlier period.
(5)For the purposes of subsections (2)(b) and (4) the charitable company's non-charitable expenditure for the earlier accounting period includes any excess expenditure attributed to the earlier period as a result of a previous operation of this section, but ignores the attribution in question.
Such adjustments must be made (whether by way of the making of assessments or otherwise) as may be required in consequence of section 515.