CTM40550 - Particular bodies: industrial and provident societies: allotment and garden societies

Trading surpluses of allotment and garden societies registered as industrial and provident society are not to be assessed to CT under Case I of Schedule D where:

• the services and facilities of the association etc, are available only to members, and
• the rules and practice of the association etc, are consistent with mutuality of trading by the members.

Registered societies will normally satisfy the above conditions. Doubtful cases should be referred to CTIAA (Technical).

Income arising from investments remains liable to tax. Rents charged by a society to its members for plots that they occupy, however, may in practice include some contribution towards the cost of providing the society's services as a whole. Where this is so, part of the overhead expenses of the association may be set off against the income assessable under Schedule A. This will normally result in there being no liability but if, exceptionally, the amounts involved are substantial, the case should be submitted to CTIAA (Technical).

The principles set out above should also be applied to unregistered allotment and garden societies.