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HMRC internal manual

Capital Gains Manual

Investment clubs: what is an investment club?

The simplest definition of an investment club is a group of people who join together to invest, primarily on the Stock Exchange. Each club should have a constitution and rules by which it is run. Amongst other things, these rules will lay down what proportionate part of the club’s investments is owned by individual members.

Members will be entitled to a share of income received from the investments, and of gains or losses made on their disposal, in accordance with the proportion of the club’s investments that they own. A member’s share of income and gains is included as part of his or her personal income and gains and qualifies in the same way for any available personal allowances and reliefs to which they may be entitled. Investment clubs are not normally charged to Corporation Tax as they do not fall within the company tax provisions. See CTM40650.

The members’ proportionate entitlement changes every time capital is invested in or withdrawn from the club.