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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
, see all updates

Particular bodies: registered societies: allotment and garden societies


Trading surpluses of  allotment and garden societies which are registered  societies should not be treated as trading income where:

• the services and facilities of the association etc, are available only to members, and

• the rules and practice of the association etc, are consistent with mutuality of trading by the members.

Registered societies will normally satisfy the above conditions.  CTIS (Technical) can advise where necessary.

Income arising from investments remains liable to tax.  Rents charged by a society to its members for plots that they occupy, however, may in practice include some contribution towards the cost of providing the society’s services as a whole.  Where this is so, part of the overhead expenses of the association may be set off against the property income.  This will normally result in there being no liability but if, exceptionally, the amounts involved are substantial, CTIS (Technical) can advise.

The principles set out above should also be applied to unregistered allotment and garden societies.