Corporation Tax Act 2010 section 939D

Circumstances in which financial advantage deemed to be obtained

Section 939D sets out specific circumstances in which a person linked to a charity donation is deemed to have obtained a financial advantage, for the purposes of determining whether a donation is "tainted" under the rules in section 939C.

• Where arrangements involve a transaction between a linked person (X) and another person (Y), a financial advantage is deemed to arise if the terms are more favourable to X or less favourable to Y than would be expected in an arm's length deal
• A financial advantage is also deemed to arise if the transaction is of a kind that an independent party in Y's position would not reasonably be expected to enter into at all
• "Transaction" is broadly defined and includes property sales or lettings, provision of services, property exchanges, loans or other financial assistance, and business investments
• These deemed circumstances are not exhaustive — a financial advantage may still arise in other situations not specifically described in this section