CTM40650 - Particular bodies: investment clubs

An investment club normally comprises of a group of friends, neighbours or work colleagues who pool monies to buy and sell shares on the stock market. It will normally be an unincorporated association. As such, it falls within the definition of company for tax purposes at ICTA88/S832 (1).

However, as the club normally receives income and gains only in a representative or fiduciary capacity on behalf of its members, rather than it its own right, it is not normally within the charge to CT, (ICTA88/S8 (2)). Individual members are instead charged to tax on their proportionate share of any income or CG and are entitled to relief in respect of their share of any capital losses.

Investment clubs should be registered with the tax office which deals with the area in which the Secretary or Treasurer of the club resides. A record of local clubs should be kept in an Establishment File, which should be reviewed shortly after 5 April annually. There is no need to set up a CT record or issue any CTSA returns.

There is more detailed guidance on investment clubs, and the procedures to be followed in respect of them, at CG20600+.

Refer any club which, exceptionally, may be within the scope of CT to CT&VAT (Technical).