Taxation of FII received by Unincorporated Assoc

Is the FII outwith scope Corporation Tax

Didn't find your answer?

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)

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paddle steamer
By DJKL
03rd Sep 2018 12:03

Do none of you have clubs with FII?

I have actually put the question to a firm to whom I refer work for them to maybe answer as a favour to me (will have to give them something more lucrative next time), they will hopefully revert today as I am meeting with club treasurer tomorrow , but was slightly surprised no answers on here; I do not seem to have much luck with some of my questions on here (not , over the years, that there have been that many)

This is not client work, this is just me giving some input/ideas to a club where I am a member.

Any input, anyone?

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By Duhamel
03rd Sep 2018 13:19

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.

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Replying to Duhamel:
paddle steamer
By DJKL
03rd Sep 2018 13:43

Thanks Duhamel , I will have a read where you have pointed.

My gut feel was they would fall outwith tax but as the tax impact is crucial to the cashflows I have prepared then if I am wrong the whole basis of what the club does re its future could be wrong, the cashflow is that tight.

Hence I wanted either some comfort that I have not missed something or Portia charging in telling me I was a pillock and I had not considered x,y and z.

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By SteveHa
23rd Feb 2019 12:34

.Oops - wasn't meant to be here. It's nice we have such an easy to use forum (not)

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