PART XII SPECIAL CLASSES OF COMPANIES AND BUSINESSES
CHAPTER VI MISCELLANEOUS BUSINESSES AND BODIES
F1506ATransactions with substantial donors
1
This section applies to the following transactions—
a
the sale or letting of property by a charity to a substantial donor,
b
the sale or letting of property to a charity by a substantial donor,
c
the provision of services by a charity to a substantial donor,
d
the provision of services to a charity by a substantial donor,
e
an exchange of property between a charity and a substantial donor,
f
the provision of financial assistance by a charity to a substantial donor,
g
the provision of financial assistance to a charity by a substantial donor, and
h
investment by a charity in the business of a substantial donor.
2
For the purposes of this section a person is a substantial donor to a charity in respect of a chargeable period if—
a
the charity receives relievable gifts of at least £25,000 from him in a period of 12 months in which the chargeable period wholly or partly falls, or
b
the charity receives relievable gifts of at least £100,000 from him in a period of six years in which the chargeable period wholly or partly falls;
and if a person is a substantial donor to a charity in respect of a chargeable period by virtue of paragraph (a) or (b), he is a substantial donor to the charity in respect of the following five chargeable periods.
3
A payment made by a charity to a substantial donor in the course of or for the purposes of a transaction to which this section applies shall be treated for the purposes of section 505 as non-charitable expenditure.
4
If the terms of a transaction to which this section applies are less beneficial to the charity than terms which might be expected in a transaction at arm's length, the charity shall be treated for the purposes of section 505 as incurring non-charitable expenditure equal to that amount which the Commissioners for Her Majesty's Revenue and Customs determine as the cost to the charity of the difference in terms.
5
A payment by a charity of remuneration to a substantial donor shall be treated for the purposes of section 505 as non-charitable expenditure unless it is remuneration, for services as a trustee, which is approved by—
a
the Charity Commission,
b
another body with responsibility for regulating charities by virtue of legislation having effect in respect of any Part of the United Kingdom, or
c
a court.