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HMRC internal manual

Company Taxation Manual

Particular bodies: housing associations: self-build societies


Self-build housing societies are usually formed to build houses for sale to members. As each house is completed the member moves in, as tenant or licensee, and pays a rent.  When all the houses are completed, they are conveyed to individual members and the society is wound up.

A self-build society approved under CTA10/S651 is exempt from tax in respect of rents paid to the society by members and from CT on chargeable gains on disposals to members.

To qualify for approval under CTA10/S651 a self-build society must

  • exist for the purpose of building or improving dwellings, mainly by use of its members’ own labour, for eventual sale to its members for their occupation, and
  • be a ‘registered society’ in Great Britain – formerly industrial and provident society, see CTM40505.

Applications for and notifications of approval are handled by the relevant regulator of social housing – see CTM40425.

Where a self-build society first wishes to claim relief under CTA10/S651 form 75 (CTM40430) should be issued in duplicate so that the society may retain a copy. The form calls for:

  1. confirmation that no land or house was occupied other than by a member of the society,
  2. confirmation that the conditions for approval were observed,
  3. a copy of the relevant authority’s letter of approval,
  4. a copy of the rules of the society,
  5. a copy of the accounts.

The claim should be made within two years of the end of the accounting period to which the claim relates (CTA10/S655).

Where the claim is acceptable, the reliefs mentioned above may be allowed and any other profits as shown by the accounts assessed in the normal way. For years subsequent to the first year of claim form 75 should be issued annually until the society is wound up. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Where a member has died, occupation by non members in accordance with the will or intestacy provisions is treated as satisfying the membership requirement for six months. See CTM40445.

HMRC has discretion to admit claims where the statutory requirements are substantially complied with. Such cases should be reported to CTIS (Technical).