Never having come across it (this is not a client but a club of which I am a member) I am spending my morning modelling a possible cashflow for said Club, it is asset rich (two let properties) but cashflow poor (given yields after CT on rents) and needs to decide its future.
I have calculated that if it sells one property, pays its CT on the gain, it ought to have circa £250k surplus funds and investing say £200k of this in ITs would more than replace the foregone, after tax, rental and bring the cashflow back into the black, the key is, the FII has to not be taxable.
Now everything I know suggests it is not, the Club follows CT rules, but given I will likely be getting on my hind legs at a Special General Meeting called to discuss what the Club does next or even if it has a future, have I missed something, am I wrong, could UK listed IT dividends somehow fall into tax for an unincorporated Association?
Thanks
DJKL
Replies (4)
Please login or register to join the discussion.
My two pence is that the dividends received would likely be subject exempt from corporation tax under s931B CTA 2009. The association falling within the CT net under s1121 CTA 2010.