Part 10

Special rules about charitable trusts etc

Substantial donor transactions

Transactions: exceptions
554
1
A transaction within section 549(1)(b) or (d) is not a substantial donor transaction if an officer of Revenue and Customs determines that the transaction—
a
takes place in the course of a business carried on by the substantial donor,
b
is on terms which are no less beneficial to the charitable trust than those which might be expected in a transaction at arm’s length, and
c
is not part of an arrangement for the avoidance of any tax.
2
The provision of services to a substantial donor is not a substantial donor transaction if an officer of Revenue and Customs determines that those services are provided—
a
in the course of carrying out a primary purpose of the charitable trust, and
b
on terms which are no more beneficial to the substantial donor than those on which services are provided to others.
3
The provision of financial assistance to a charitable trust by a substantial donor is not a substantial donor transaction if an officer of Revenue and Customs determines that the assistance—
a
is on terms which are no less beneficial to the charitable trust than those which might be expected in a transaction at arm’s length, and
b
is not part of an arrangement for the avoidance of any tax.
4
Investment by a charitable trust in the business of a substantial donor is not a substantial donor transaction if the investment takes the form of the purchase of shares or securities listed on a recognised stock exchange.
5
The following are not substantial donor transactions—
a
a disposal at an undervalue in respect of which relief is available under section 431 or section 587B of ICTA (gifts of shares, securities and real property), or
b
a disposal at an undervalue to which section 257(2) of TCGA 1992 (gifts of chargeable assets) applies,
but such disposals may be taken into account in the application of section 549(2).