Particular bodies: housing associations: co-operatives - nature of relief and claim
S642 (for income) and S643 (for gains) within CTA10/PART13/CHAPTER7 provide reliefs to approved co-operative housing associations (CTM40425) as follows:
- rents paid to the association by members are disregarded for tax purposes
- interest payable by the association is disregarded
- the association is exempt from CT on chargeable gains on the disposal of any property which has been or is occupied by a tenant of the association (see CG12624).
Where relief is allowable under CTA10/S642 the association is still liable to CT on any investment income not specifically exempted by the section such as, for example, interest received on a bank deposit account. It is also liable to CT on other chargeable gains that do not fall within (c) above.
A co-operative housing association will not normally make distributions within the meaning CTA10/PART23. CTA10/S1064 cannot apply because a ‘registered society’ in Great Britain – formerly industrial and provident society, cannot be a close company (see CTM40505).
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)