Section 54 of the Housing Act 1988 authorises the Secretary of
State for the Environment to pay grants (tax relief grants) from 1
April 1989 to certain housing associations (as defined in
subsection (2)) in reimbursement of CT. In Northern Ireland, the
equivalent provision is at Article 22, Housing (NI) Order 1992
(SI1992/1725 (NI15).
In England and Wales no grants will be paid for accounting
periods commencing after 31 March 1999, following a phased
withdrawal.
In England the Housing Corporation (
CTM40405) carried out this function. In
the following guidance, references to the Housing Corporation
should be read as relating:
Section 54 Housing Act 1988 appears under `Other Legislation' in
the Taxes Acts volumes.
Housing associations that had been approved for the purposes
of relief under ICTA88/S488 (
CTM40415) did not qualify for grants
under Section 54 Housing Act 1988. In effect, Section 54 gave the
Housing Corporation discretionary powers to give some relief to
those associations whose activities were not wholly capable of
being approved under Section 488 or of achieving the criteria
necessary for registering as charities.
Where liability to interest on unpaid tax was incurred, the
grant could cover this as well as the tax (where, for example, the
delay in payment was the responsibility of the Housing
Corporation). The grant did not, however, include tax which the
association was entitled to deduct on making payments, for example,
of interest paid to a person whose usual place of abode is not
within the UK, (ICTA88/S486 (3)).
Where a housing association has received a Section 54 grant,
any IT deducted from any taxed income received should be dealt with
in the normal way, that is repaid or set off under ICTA88/SCH16
(see
CTM35125) and/or ICTA88/S7 (2) (see
CTM35220).
