Introduction Payments to bodies outside the UK: non-charitable expenditure
13.Paragraph 2 changes a specific condition that disqualifies a payment, made by a charity to a body outside the UK, from qualifying as charitable expenditure. If the condition applies, the expenditure is considered to be non-charitable under section 543(1)(f) of ITA for charitable trusts, or section 496(1)(d) of CTA for charitable companies, and tax relief is restricted accordingly.
14.Sub-paragraph (1) inserts the new requirement in section 547(b) of ITA that, for a payment to an overseas body to qualify as charitable expenditure, the Commissioners for HM Revenue & Customs (HMRC) must consider that the charity’s trustees took reasonable steps to ensure the money would be used for charitable purposes.
15.Sub-paragraph (2) inserts the new requirement in section 500(b) of CTA that, for a payment to an overseas body to qualify as charitable expenditure, the Commissioners for HMRC must consider that the charity’s directors took reasonable steps to ensure the money would be used for charitable purposes.