The final words of ICTA88/S209 (1) (distributions in a
winding-up) do not apply to the dissolution of most unincorporated
associations because these have no share capital or anything
analogous to it. (One exception is ancient deed of settlement
‘companies’ which have a share capital but are
unincorporated.)
However ESCC15 (see
CTM15540) applies if substantially the
whole of an association's activities have been of a social or
recreational nature, it has not carried on an investment business
or a trade other than a mutual trade, and the amount distributed to
each member is not large (£2000 or less). By concession, the
association is then given the usual option (as with ESCC16) of not
having Section 209 applied and of having the whole of the amounts
distributed treated as capital receipts of the members for the
purpose of calculating any chargeable gains arising to them on the
disposal of their individual interests in the association.
ICTA88/S254 (1) specifically provides that a member's interest in
an association is to be regarded as a ‘share’, so that
distributions of the assets are qualifying distributions. The
amount would, however, be limited by ICTA88/S490 (4) to
distributions made out of profits brought into CT charge or out of
franked investment income.
The dissolution of an unincorporated association is not
normally considered to constitute a ‘winding up’.
