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HMRC internal manual

Business Income Manual

Specific deductions: gifts in kind and payroll giving: relief for gifts of medical supplies and equipment by companies: World Health Organisation guidelines

S107 Corporation Tax Act 2009

Companies are able to obtain tax relief for donations of trading stock of medical supplies and/or medical equipment for humanitarian purposes. No amount is brought into account in calculating the trading profits in relation to the stock given away (see BIM45180).

The legislation requires not simply that the medical supplies or equipment concerned is given for human use (see BIM45185), but in addition that the gift is made ‘for humanitarian purposes’. This further condition reflects the broad intention of the provisions, which is to encourage responsible and appropriate donations.

The World Health Organisation produces guidelines for drug donations. They are accessible at and are summarised below.

Cases that fall within the World Health Organisation guidelines should be accepted as meeting the condition that the gift is made for humanitarian purposes. If the circumstances of the case give any reason for doubting that the gift was made for humanitarian purposes, advice should be sought from CTISA (Technical).

Summary of the World Health Organisation guidelines for drug donations

Selection of drugs

  1. All drug donations should be based on an expressed need and be relevant to the disease pattern in the recipient country. Drugs should not be sent without prior consent by the recipient.
  2. All donated drugs or their generic equivalents should be approved for use in the recipient country and appear on the national list of essential drugs, or, if a national list is not available, on the World Health Organisation model list of essential drugs, unless specifically requested otherwise by the recipient.
  3. The presentation, strength and formulation of donated drugs should, as much as possible, be similar to those of drugs commonly used in the recipient country.
  4. All donated drugs should be obtained from a reliable source and comply with quality standards in both donor and recipient country.
  5. No drugs should be donated that have been issued to patients and then returned to a pharmacy or elsewhere, or were given to health professionals as free samples.
  6. After arrival in the recipient country all donated drugs should have a remaining shelf life of at least one-year. There are certain exceptions provided for this rule.

Presentation, packing and labelling

  1. All drugs should be labelled in a language that is easily understood by health professionals in the recipient country; the label on each individual container should at least contain the International Non-proprietary Name (INN) or generic name, batch number, dosage form, strength, name of manufacturer, quantity in the container, storage conditions and expiry date.
  2. As much as possible, donated drugs should be presented in larger quantity units and hospital packs.
  3. All drug donations should be packed in accordance with international shipping regulations, and be accompanied by a detailed packing list which specified the contents of each numbered carton by INN, dosage form, quantity, batch number, expiry date, volume, weight and any special storage conditions. The weight per carton should not exceed 50 kilograms. Drugs should not be mixed with other supplies in the same carton.

Information and management

  1. Recipients should be informed of all drug donations that are being considered, prepared or actually under way.
  2. In the recipient country the declared value of a drug donation should be based upon the wholesale price of its generic equivalent in the recipient country, or, if such information is not available, on the wholesale world-market price for its generic equivalent.
  3. Costs of international and local transport, warehousing, port clearance and appropriate storage and handling should be paid by the donor agency, unless specifically agreed otherwise with the recipient in advance.