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A hunt club is considering merging with a neighbouring club as a result of which its members will become members of the other club and the present club will be closed down in due course.
The only significant asset of the club is land (possibly with development possibilities). Given that the club is an unincorporated association, the capital gain will be taxed at corporation tax rates. But what happens to the residue if this is distributed to the members? Does it again attract capital gains tax in their hands or is it classed as a dividend?
A hunt club is considering merging with a neighbouring club as a result of which its members will become members of the other club and the present club will be closed down in due course.
The only significant asset of the club is land (possibly with development possibilities). Given that the club is an unincorporated association the capital gain will be taxed at corporation tax rates. But what happens to the residue if this is distributed to the members? Does it again attract capital gains tax in their hands or is it classed as a dividend?
Readers' views will be appreciated.
Query T16 800 — Duke Tony.
Reply by N.K.:
As per TCGA 1992 s 288 the legal standing of the club is that '“company” includes any body corporate or unincorporated association …'.
Then TA 1988 s 490(4)...
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