CG66635 | Capital Gains Tax and Gifts: Exemptions and No Gain/No Loss: Gifts of Land to Housing Associations

TCGA92/S259 brings the Capital Gains Tax treatment of gifts of land to non-charitable registered housing associations into line with the rules which apply to gifts of land to charitable housing associations. The legislation refers to gifts to a ‘relevant housing provider’, defined as any of:

• A non-profit registered provider of social housing

• A registered social landlord within the meaning of Part 1 of the Housing Act 1996

• A body registered in the register maintained under section 20(1) of the Housing (Scotland) Act 2010

• A registered housing association within the meaning of Part 2 of the Housing (Northern Ireland) Order 1992

The provisions apply to disposals made on or after 14 March 1989 and a claim to the relief has to be made by the donor and the association.

If the land is given or transferred at less than market value to a registered housing association the market value rule (TCGA92/S17) does not apply. The transfer is not treated as taking place at market value.

If the consideration for the transfer is greater than the sums allowable as a deduction under TCGA92/S38, which do not include the indexation allowable, then you compute the chargeable gain in the normal way using the actual consideration received as the disposal proceeds. This is also the housing association’s acquisition cost. As with a charity the housing association is treated as having the original owner’s date of acquisition.

If the consideration does not exceed the amount of the TCGA92/S38 expenditure the person making the disposal will be treated as making neither a gain nor a loss after any indexation allowance. This is also the housing association’s acquisition cost. As with a charity the housing association is treated as having the original owner’s date of acquisition.