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Community Amateur Sports Clubs

Chargeable gains exemption - application of funds

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Good morning all

I am Treasurer and accountant for local tennis club (a registered CASC). Our clubhouse is far too big for our needs (and is remote from the courts) and so we have obtained outline planning consent for conversion to dwelling and plan to sell it to developer for single cash payment. Our intention is to use some of the cash to build a smaller clubhouse adjacent to the courts and to put down an artificial surface. However, it is likely that we will have a fair amount of cash left over. This may or may not go towards upkeep and other costs of the club but at the outset it will not be earmarked for any specific purpose. The problem that I have is that HMRC's guidance doesn't seem to say an awful lot about the application of funds for qualifying purposes (we are looking at a sizeable gain). Is there a time-limit by which the funds need to be applied?


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By Wilson Philips
26th Jan 2021 10:00

I think you have to apply a bit of reverse logic. It is not so much that the funds need to be applied for a qualifying purpose (although that is what the legislation says) but more that the funds must not be applied for a non-qualifying purpose. So long as none of the surplus cash is used for a non-qualifying purpose you should be fine. If it is in fact used for non-qualifying purposes in future periods then the CASC relief for those future periods (and possibly previous periods) will be restricted.

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