Tax relief on gift to community benefit society

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I have a client who has purchased some land in their local area with the intention of obtaining planning for affordable housing, and then gifting the land to an affordable housing provider (e.g. English Rural Housing Association) to develop the houses. The client expects that they should be able to obtain some form of tax relief for the gift of land if the provider is a not-for-profit society. 

 

Under s.431 ITA 2007 an individual that gifts a qualifying interest in UK land to a “charity” is entitled to claim relief by deducting the value of the land in calculating the individual's net income. The legislation refers only to charity and s.436 includes a short list of exempt bodies to be treated as charities within that chapter.

 

Schedule 6 of FA 2010 defines a charity (for the purposes of income tax, capital gains tax and inheritance tax, amongst others) as “a body of persons or trust that—

 

  1. is established for charitable purposes only,
  2. meets the jurisdiction condition,
  3. meets the registration condition, and
  4. meets the management condition.

 

Schedule 3 of the Charities Act 2011 also includes a list of exempt charities including:

 

Housing

 

26        Any registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, if the society is also a non-profit registered provider of social housing.

 

27        Any registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, if the society is also registered in the register of social landlords under Part 1 of the Housing Act 1996.

 

HMRC guidance on exempt charities (CC23) also includes a heading under charitable registered societies, including housing providers, who are registered with the FCA and the Regulator of Social Housing.

 

English Rural Housing Association is registered with the FCA and its annual return states that it is accepted by HMRC as a charity for tax purposes. It is also registered with the regulator of social housing.

 

Whilst it seems clear to me that English Rural Housing Association and other community benefit societies that meet the definition of an exempt charity can benefit from the tax reliefs of charities (i.e. relief from income tax and capital gains tax), the position seems less clear for an individual making a gift of land to such bodies and whether they would receive the same income tax and capital gains tax relief that they would if making the gift to a charity.

 

Any relevant experience or confirmation that a community benefit society can fall within the definition of charity for the purposes of s.431 ITA 2007 (and s.257 TCGA 1992) would be appreciated.

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Replying to janewanless:
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By OCJ
14th Apr 2022 08:54

That guidance only states that you cannot get Income Tax relief on donations to community amateur sports clubs (CASCs), it doesn't refer to community benefit societies.

My question is whether community benefit societies that meet the definition of an exempt charity (and qualify for charity tax reliefs from their own perspective) meet the definition of charity such that the donor can also qualify for relief from capital gains tax and income tax.

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