CG73100 - Housing associations
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Introduction
This guidance sets out specific treatments for certain housing associations and providers when they dispose of certain property and other assets.
In particular is considers a claimable exemption for approved housing associations when they dispose of certain property. It also sets out the requirement for a housing association to be approved.
It then considers various transactions where the transfer of certain assets will be treated as no gain/no loss transfers such as:-
- Approved schemes by a housing regulator;
- Certain disposals by housing related bodies to each other or a housing regulator.
Some specific guidance concerning no gain/no loss transfers, including assets held at 31 March 1982, is then provided.
Finally the tax implication of gifting certain assets to housing associations is then referenced.
The main legislation considered in this guidance is:-
- CTA2010/S643,
- TCGA92/S218,
- TCGA92/S219,
- TCGA92/S220,
- TCGA92/S259.
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Disposal of properties by approved housing associations
CTA2010/S643
A housing association approved under CTA2010/S643 can claim exemption from tax on certain chargeable gains. The exemption covers gains arising from the sale of properties which are or have been occupied by tenants of the association.
The exemption does not apply to unapproved housing associations or to gains arising from other kinds of assets.
For more information on housing associations see CTM40400.
Approved housing association
CTA2010/S644 & 645
A housing association must be approved by one of the authorities listed at CTA2010/S644.
Only housing associations satisfying Tests A to E at CTA2010/S645 can be approved.
Test A is that the association is:-
- a registered housing association within the meaning of the Housing Associations Act 1985, or
- a housing association within the meaning of Part II of the Housing (Northern Ireland) Order 1992.
Test B is that the association is:-
- a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or
- a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969.
Test C is that the rules of the association:-
- restrict membership to persons who are tenants or prospective tenants of the association, and
- preclude the granting or assignment of tenancies to persons other than members.
Test D is that the association satisfies any other requirements prescribed by:-
- the Secretary of State as regards England and Scotland,
- the Welsh Ministers as regards Wales, or
- the Department for Social Development as regards Northern Ireland.
Test E is that the association will comply with any conditions that may be prescribed by:-
- the Secretary of State as regards England and Scotland,
- the Welsh Ministers as regards Wales, or
- the Department for Social Development as regards Northern Ireland.
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The Regulator of Social Housing
TCGA92/S218
The Regulator of Social Housing (or the Secretary of State or Scottish Homes) may, under an approved scheme, acquire all the land (and related assets) previously held by one housing association and then transfer them to another housing association. Both transactions are to be treated as giving rise to neither a gain nor a loss to the regulator and the housing association concerned.
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Disposals by housing related bodies
TCGA92/S219
The following disposals are treated as no gain/no loss disposals under TCGA92/S219.
- A disposal of land by a housing regulator or other appropriate agency or authority to a relevant housing provider.
- A disposal of land by one relevant housing provider to another.
- A disposal of property, other than land, by one relevant housing provider to another as the result of an appropriate direction by a housing regulator.
- A disposal of land to a housing regulator or the Homes and communities Agency by either a relevant housing provider or an unregistered self-build society.
The housing regulators are:-
- The Regulator for Social Housing,
- The Scottish Housing Regulator,
- The Secretary of State,
- Scottish Homes,
The other appropriate agencies and authorities are:-
- The Homes and Communities Agency,
- The Greater London Authority.
A relevant housing provider means:-
- A non-profit registered provider of social housing,
- A registered social landlord within the meaning of Part I of the Housing Act 1996, or
- A body registered in the register maintained under section 20(1) of the Housing (Scotland) Act 2010.
An appropriate direction is one given under:-
- Section 167 of the Housing and Regeneration Act 2008,
- Section 106 of the Housing (Scotland) Act 2010,
- Part I of the Housing Act 1996, or
- Part I of the Housing Associations Act 1985,
An unregistered self-build society has the same meaning as set out in the Housing Associations Act 1985.
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Northern Ireland Housing Associations
TCGA92/S220
The following disposals are treated as no gain/no loss disposals under TCGA92/S220.
- A disposal of land by one registered Northern Ireland housing association to another.
- A disposal of property, other than land, by one registered Northern Ireland housing association to another as a result of a direction under Chapter II of Part VII of the Housing (Northern Ireland) Order 1981 given by the Department of the Environment for Northern Ireland.
A registered Northern Ireland housing association means a register housing association within the meaning of Part VII of the Housing (Norther Ireland) Order 1981.
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Specific rules for no gain/no loss disposals
Indexation allowance
On any of the disposals listed above in TCGA1992/S218, 219 & S220, no chargeable gain or allowable loss will accrue to the transferor. The transferee will acquire the asset at its cost to the transferor plus, if due, any indexation allowance (but see CG17730 as indexation allowance cannot create or increase a loss).
Land held at 6 April 1965
If the land or related assets were owned either by the original housing association or a housing regulator at 6 April 1965, any chargeable gain arising on a later disposal by the second housing association should be calculated as if the association and the regulator were members of a group of companies, see CG45100P.
Land held at 31 March 1982
If the land or related assets were owned either by the original housing association or a housing regulator at 31 March 1982, any chargeable gain arising on a later disposal by the second housing association should be calculated on the basis that the second housing association owned the asset at 31 March 1982, see CG16880P.
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Gifts to housing associations
TCGA92/S259
Certain gifts of land to housing associations can be treated as no gain/no loss transfers, see CG66635.