Corporation Tax Act 2010 section 511

Approved charitable investments

Section 511 defines the types of investment that count as "approved charitable investments" for the purposes of the non-charitable expenditure rules, which can restrict a charitable company's tax exemptions.

• Twelve categories of approved charitable investment are specified, ranging from government securities and bank deposits to interests in land and units in unit trust schemes.
• Investments in common investment funds and common deposit funds established under charities legislation qualify, as do similar funds set up exclusively for the benefit of charities by statute.
• Bank deposits qualify only where interest is paid at a commercial rate and the deposit is not part of an arrangement under which the bank lends to another person.
• Where an investment does not fall within any of the specified categories, it can still qualify if HMRC is satisfied, on a claim, that it is made for the charity's benefit and not for tax avoidance.