Corporation Tax Act 2010 section 211

Meaning of "disposal-related obligation"

Section 211 defines what counts as a "disposal-related obligation" in connection with a qualifying investment disposed of to a charity, which is relevant to calculating the tax relief available under this Chapter.

• An obligation is "disposal-related" if the disposal to the charity would not have been made without it (condition A), or if the obligation relates to, is framed by reference to, or is conditional on the charity receiving the qualifying investment or a related investment (condition B).
• The obligation can be owed to anyone — not just the disposing company or persons connected with it — and includes informal schemes, arrangements or understandings, whether or not legally enforceable, as well as a series of obligations between different parties.
• When testing condition A, all circumstances must be considered, including the difference in the net benefit to the charity calculated with and without treating the obligation as disposal-related (as computed under section 209).
• A "disposal-related investment" for condition B purposes means an asset of the same class as the qualifying investment (regardless of size or amount), an asset derived from or representing it, or an asset from which the qualifying investment is itself derived — in each case whether wholly or partly, directly or indirectly.