Income Tax Act 2007 section 547

Section 543(1)(f): payment to body outside the UK

Section 547 deals with when payments made by a charitable trust to an organisation located outside the United Kingdom are treated as non-charitable expenditure.

• Payments to bodies outside the UK can be classed as non-charitable expenditure even if intended for charitable purposes
• The burden falls on the trustees to demonstrate they have taken reasonable steps to ensure the money is applied for charitable purposes
• What counts as "reasonable steps" is judged by HMRC based on the circumstances of each case
• Failure to satisfy HMRC that adequate steps were taken means the payment is treated as non-charitable expenditure under section 543(1)(f)