HMRC internal manual

Museums and Galleries Exhibition Tax Relief

MGETR80020 - Museums and Galleries Exhibition Tax Relief: qualifying companies: direct tax

Qualifying companies are those constituted as companies and who are subject to Corporation Tax.  However, charities are exempt from Corporation Tax on a number of sources of income and gains including charitable trading profits, rental income, capital gains and interest, provided the income and/or gains are applied to charitable purposes only.

HMRC guidance about charities can be found at Charities (GOV.UK).


A charity should take professional advice on whether acting as an MGEPC in any way impacts on its charitable status.


It is beyond the scope of this guidance manual to comment on charitable status.


Local authorities are exempt from Corporation Tax or Income Tax on their income under CTA 2010 S894 and ITA 2007 S838.


Charitable companies and wholly owned subsidiaries of charities or local authorities, are entitled to claim MGETR on their enhanceable expenditure provided:

  • the exhibition is a qualifying exhibition and not an excluded exhibition
  • not less than 25% of the core expenditure on the exhibition is European expenditure


MGEPC that is a wholly owned trading subsidiary of a charity or local authority

A charity or local authority may have a wholly owned trading subsidiary, which could become the MGEPC.

This model of using a special purpose vehicle (SPV) is commonly used in the other Creative Industry Tax Reliefs.

The wholly owned trading subsidiary will be within the charge to Corporation Tax and must be a qualifying MGEPC.

It will not be sufficient for a charity or local authority to carry on the functions of a MGEPC (directly negotiating contracts, etc.) and merely to use the subsidiary to claim the tax relief.  The trading subsidiary in those circumstances will not be a qualifying MGEPC.

This is not to say, however, that a trading subsidiary which meets the MGEPC description cannot subcontract some activities back to a charity or local authority parent.

A charity or local authority should ensure that using this model will not impact on its status and consider the potential VAT implications (see MGETR70030).

A charity or local authority should take professional advice about tax or any other implications of setting up a separate trading subsidiary.

It is not HMRC’s responsibility to provide advice on tax planning.