Corporation Tax Act 2010 section 504

Non-charitable expenditure in substantial donor transactions

Section 504 specifies that certain amounts arising from transactions between a charity and a substantial donor are treated as non-charitable expenditure, which can affect the charity's tax exemptions.

• When a charity enters into a transaction with a substantial donor, certain amounts connected with that transaction may be classified as non-charitable expenditure.
• Non-charitable expenditure treatment means the amounts could reduce or remove the charity's entitlement to corporation tax exemptions.
• Decisions about whether transactions fall within these rules are made by an officer of Revenue and Customs, rather than requiring a determination by the Commissioners for HMRC.
• If a charity disagrees with an officer's decision, it may appeal, and the tribunal has the power to affirm or replace that decision.