BIM24480 - Mutual trading: allocation of Income: introduction
Introduction and layout of guidance
A mutual trader often has income from outside the ‘circle
of mutuality’. Where such income arises from the carrying on
of a trade it is taxable under Case I of Schedule D.
The following paragraphs provide guidance on how to allocate
the income received by the mutual trader between:
- non-taxable dealings with contributors, and
- taxable dealings with non-contributors.
There are some categories of trading income (for example
television or sponsorship income) that derive entirely from
non-contributors. There are some receipts that derive entirely from
contributors (for example income from a members’ only
facility). And there are some receipts that derive partly from
contributors and from non-contributors - for example takings from a
facility available both to members and non-members.
You will need to establish the underlying facts to allow an
allocation of income between taxable (non-mutual) and non-taxable
(mutual). Under no circumstances can losses relating to the mutual
trade be set against profits derived from the non-mutual trade.
The following guidance covers:
| BIM24485 | Nature of activities |
| BIM24490 | Income from contributors |
| BIM24495 | Income from non-contributors |
| BIM24500 | Mixed income |
| BIM24505 | Sundry activities |
