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Capital gains tax implications of share investment club membership
KEY POINTS
- Share investment clubs are groups of individuals; they do not pay corporation tax.
- The capital gains are calculated as normal.
- New members will buy units at the current value.
- Leavers must take account of gains in redeemed units.
- A worked example of the life of an investment club.
Share investment clubs consist typically of a few friends and acquaintances who meet regularly to invest in exchange traded shares. A club will have a constitution and rules that prescribe the election of officers the number required for a quorum etc.
Each member may pay a regular “subscription” into the club – not necessarily the same for all members – in return for “units” issued by the club.
Members may also buy additional units or...
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