B5.850 Non-charitable expenditure
Tax relief is restricted where a charity incurs, or is deemed to incur (for example, under the rules for transactions with substantial donors — see B5.851) non-charitable expenditure. These rules apply for chargeable periods beginning after 21 March 20061.
Definition of non-charitable expenditure
Non-charitable expenditure is defined as2:
- Ìý
•ÌýÌýÌýÌý expenditure not applied for charitable purposes only
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•ÌýÌýÌýÌý expenditure on non-qualifying investments
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•ÌýÌýÌýÌý expenditure on non-qualifying loans
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•ÌýÌýÌýÌý expenditure on transactions with substantial donors broadly before 1 April 2013 (see B5.851)
For HMRC guidance see Annex ii: non-charitable expenditure.
There are, however, special rules as regards payments overseas and loans and investments made by the charity.
Payments overseas
Where a payment is made or committed to an overseas body, it will be treated as charitable expenditure if the charity take such steps as HMRC considers reasonable to ensure that the money will be properly applied by the body outside the UK3.
When considering whether the steps taken by the charity were reasonable
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