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Capital Gains tax on not-for-profit Association

Think I already know the answer to this, but I have a client (a Company ltd by guarantee) applying for a Corporation tax exemption on the grounds of being a not for profit club funded almost entirely from mutual trading.

They are selling their premises to raise funds to continue and will rent in future so we shortly expect a decent gain.

Charities are exempted from CGT if they use the funds for "Charitable purposes", so I'm wondering if an exempted not for profit organisation (but not a registered Charity) selling its only property to raise funds for its continued work to benefit members would be subject to tax?

Any answers?

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11th Jun 2012 16:39

What sort of club is it?

Would it be possible to become charitable, eg amateur sport, village hall.?

If so worth considering as otherwise I believe Gain will be taxed.

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