Income Tax Act 2007 section 809ZJ

Tainted donations

Section 809ZJ defines when a relievable charity donation is treated as a "tainted donation" by setting out three conditions that must all be met, and provides exclusions for certain charity-owned companies and relevant housing providers.

• A donation is tainted only if all three conditions (A, B and C) are satisfied — the donation must be linked to arrangements, those arrangements must aim to secure a financial advantage from the charity, and the donor must not be an excluded entity
• Condition A requires that the donor or a connected person has entered into arrangements that are not independent of the donation — judged by looking at the likely effects and the circumstances in which both the donation and the arrangements were made
• Condition B requires that a main purpose of the arrangements is to obtain a financial advantage from the recipient charity (or a connected charity) for the donor or a connected person who is not a charity — such a person is called a "potentially advantaged person"
• Condition C excludes from the tainted donation rules donations made by a qualifying charity-owned company or by a relevant housing provider that is linked with the recipient charity, so that normal commercial flows such as annual profit donations from trading subsidiaries or transfers within housing groups are not caught