31.—(1) A charitable company shall be exempt from corporation tax in respect of an offshore income gain if the gain is applicable and applied for charitable purposes.
(2) See section 535 of ITA 2007 for an exemption for income tax purposes for offshore income gains accruing to a charitable trust.
(3) Paragraphs (4) and (5) apply if—
(a)property held on charitable trusts ceases to be subject to charitable trusts, and
(b)that property represents directly or indirectly an offshore income gain.
(4) The trustees are treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value.
(5) An offshore income gain accruing on the disposal arising under paragraph (4) is treated as an offshore income gain not accruing to a charity.
(6) In this regulation “charity” and “charitable company” have the same meaning as in section 506 of ICTA(1).
Section 506 was amended by section 55(2) of the Finance Act 2006 (c. 25) and paragraph 95 of Schedule 1 to the Income Tax Act 2007 (c. 3).