Income Tax Act 2007 section 548

Section 543(1)(i) and (j): investments and loans

Section 548 clarifies how reinvested or re-lent funds within the same tax year are treated for the purposes of calculating non-charitable expenditure by a charitable trust.

• Where a charitable trust realises a non-approved investment or receives repayment of a non-approved loan within a tax year, special rules apply to any reinvestment or re-lending of those funds in the same year.
• Reinvesting or re-lending the recovered funds in the same tax year does not count as non-charitable expenditure, provided the amount does not exceed the original sum invested or lent.
• Only genuinely new expenditure on investments or loans, or net increases in such investments or loans, is treated as non-charitable expenditure for the purposes of section 543(1)(i) and (j).
• Approved charitable investments (as defined in section 558) and approved charitable loans (as defined in section 561) are excluded from this provision, as they are not treated as non-charitable expenditure in any event.

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