Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Profits definition

What does Profits mean? Profits describes the net surplus generated by a business or asset after deducting relevant costs, used to assess performance, tax liabilities, distributions and damages. The precise meaning is context‑specific. For corporation tax in the UK and Ireland, legislation provides that a company’s profits include both income and chargeable gains (capital gains), not just trading results. Key distinctions include: - Accounting profit: measured under applicable GAAP. - Taxable profits: accounting profit adjusted by statute (for example, disallowables, capital allowances, losses and group relief). - Distributable profits: profits available for lawful dividends under companies legislation (UK Companies Act 2006, Irish Companies Act 2014), broadly the company’s...

UK corporation tax: qualifying charitable donations, management expenses and investment business—carry-forward, group relief limits, non-UK charity restriction and gifts of pre-eminent property

Published by a LexisNexis Tax expert

Practice notes

Companies subject to corporation tax may set qualifying charitable donations (QCDs) against total Profits once all other reliefs have been claimed, except Group relief and group relief for carried‑forward losses, allowing profits to be reduced to nil. Any surplus QCDs lapse unless the company has an investment business.

Investment businesses may deduct management expenses from total profits, and this deduction must be taken before any other deductions from total profits.
Unused management expenses can be carried forward to the next accounting period and set against that period’s total profits or, for losses arising on or after 1 April 2017, surrendered for group relief.
Where there are excess QCDs, they can be carried forward as management expenses, but cannot be surrendered for group relief for carried‑forward losses.

For accounting periods beginning on or after 1 April 2024, donations to non‑UK charities do not attract relief.

Relief for qualifying charitable donations

When a company makes a QCD in an accounting period, it may deduct that amount from its total profits, thereby lowering taxable total profits...

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Web page updated on 21/05/2026

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