Income Tax Act 2007 (c. 3)

Part 13 U.K. Tax avoidance

[F1 CHAPTER 8 U.K. Tainted charity donations

Textual Amendments

F1 Pt. 13 Ch. 8 inserted (19.7.2011) (with effect in accordance with Sch. 3 para. 27 28 of the amending Act) by Finance Act 2011 (c. 11), Sch. 3 para. 1

Tainted donations U.K.

809ZK Circumstances in which financial advantage deemed to be obtained U.K.

(1) This section applies for the purposes of Condition B.

(2) Subsection (3) applies where the arrangements entered into by the linked person (as mentioned in Condition A) involve a transaction to which—

(a) that or any other linked person (“X”), and

(b) another person (“Y”),

are parties.

(3) X obtains a financial advantage from the charity to which the donation is made or a connected charity if—

(a) the terms of the transaction are less beneficial to Y or more beneficial to X (or both) than those which might reasonably be expected in a transaction concluded between parties dealing at arm's length, or

(b) the transaction is not of a kind which a person dealing at arm's length and in place of Y might reasonably be expected to make.

(4) Nothing in this section is intended to limit the circumstances in which a linked person may be regarded as obtaining a financial advantage for the purposes of section 809ZJ.

(5) In this section—

• “Condition A” and “Condition B” have the same meaning as in section 809ZJ;

• “linked person” has the meaning given by section 809ZJ(3);

• “transaction” includes (for example)—

  (a)

  the sale or letting of property,

  (b)

  the provision of services,

  (c)

  the exchange of property,

  (d)

  the provision of a loan or any other form of financial assistance, and

  (e)

  investment in a business.]