Particular bodies: housing associations: co-operatives - disqualifying letting
- by the association to non-members,
- by a member to a non-member.
In the case of 1. above, the association should be asked for an explanation if, as is likely, such letting is not permitted by its rules. A report should be made to CTIS (Technical) including an estimate of the probable rental income arising on the rents from non-members.
In the case of 2. above, the official letter of approval issued to the association (CTM40425)
specifies the limited extent to which sub-letting by members will be permitted. If this limit is exceeded advice should be sought from CTIS (Technical).
Where it is agreed that the requirements of CTA10/S647 (3) have been substantially complied with the rents from non-members will be taxable under the normal property income rules. The interest paid in respect of a property let to a non-member will not be within CTA10/S642 and the loan relationship provisions will apply.