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There are provisions¹ restricting the tax exemption or relief granted to charities which enter into certain transactions with a substantial donor.

The rules apply for transactions occurring after 21 March 2006, unless they were undertaken as part of a contractual arrangement made before 22 March 2006 (otherwise than in pursuance of a variation of the terms of a contract on or after that date)². For HMRC guidance see Annex II 'Non-charitable expenditure' para 10.

However, FA 2011 introduced the concept of 'tainted' charity donations as a means of deterring abuse of the charity tax reliefs (see B5.852) and it applies in respect of charitable donations made on or after 1 April 2011.

Substantial donor transactions with donors who were already substantial donors before 1 April 2011 continued to be chargeable under the existing legislation up to and including 31 March 2013 after which date those provisions were repealed, except in the case of transactions occurring on or after 1 April 2013 where the contractual obligations were entered into before 1 April 2013³.