208 Lands owned and occupied, and trades carried on, by charities

(1) A charity is defined as any body of persons or trust established for charitable purposes only. This section exempts from income tax certain income arising to charities. Finance Act 2024 amended section 208 TCA to allow a charity to retain its charitable exemption so long as it applies its income to charitable purposes by the end of the fifth year after the year in which the income is received. A charity may obtain an extension of this period provided it can satisfy the Revenue Commissioners that it is in the process of applying the funds for charitable purposes.

The sources of income to which the exemption applies are —

• (2)(a) income arising from lands, tenements or hereditaments which are owned and occupied by a charity and used within the timeframe mentioned in s208(4) or of any of the other concerns set out in section 18(2), which would otherwise be taxed under Case I(b) of Schedule D,
• (2)(b) profits, which would otherwise be taxed under Case I or Case II of Schedule D, where the profits are applied solely for the purpose of the charity, and, are used within the timeframe mentioned in s208(4), either for;
  1. (2)(b)(i) the trade or profession is exercised in the course of the actual carrying out of the primary purpose of the charity or
  2. (2)(b)(ii) the work in connection with the trade or profession is mainly carried on by beneficiaries of the charity.

(3) Where the trading profits arise from a trade of farming carried on by a charity, those profits need not be applied solely for charitable purposes.

1. (4) The exemptions only apply if the income or sources of income are applied to charitable purposes before the end of the fifth year of assessment after the year of assessment in which the rents, profits or income were received.
2. The Revenue Commissioners may allow an extension of the period if they are satisfied that the charity is in the process of applying the profits or gains for charitable purposes.