Corporation Tax Act 2010 section 500

Section 496(1)(d): payment to body outside the UK

Section 500 deals with the treatment of payments made by a charitable company to a body situated outside the United Kingdom, and the circumstances in which such payments are classified as non-charitable expenditure.

• Payments to overseas bodies are treated as non-charitable expenditure if the charitable company has not taken reasonable steps to ensure the funds are applied for charitable purposes
• The payment must have been incurred for charitable purposes only in the first instance for this rule to apply
• HMRC determines what constitutes "reasonable steps" based on the circumstances of each case
• The burden of proof falls on the charitable company to demonstrate it has taken adequate measures to verify the charitable application of the funds