SolvedCTM40435 | Particular bodies: housing associations: co-operatives - unlet properties
From HM Revenue & Customs · Company Taxation Manual
Interest paid by a housing association (CTM40405) in respect of properties that are in course of building, or which are completed but not yet let, cannot form part of the claim under CTA10/S642 (CTM40420) as there is no tenancy – see CTA10/S642 (4). The interest should be excluded when calculating the relief allowable to members. The interest to be excluded can be determined by any reasonable method of apportionment, for example, by reference to the approximate amounts of the capital expenditure on the respective properties.
Example
| Total rents receivable by the association | £25,000 |
|---|---|
| Add notional rent for one unlet property (six months) | £ 1,250 |
| £26,250 | |
| Total interest paid by association | £15,000 |
| Less treated as paid by members (£25,000 / £26,250 x £15,000) | £14,290 |
| Balance to be treated as paid by association | £ 710 |
The balance treated as paid by the association rather than the members will be allowable to the association under the normal rules for ‘registered societies’ in Great Britain – formerly industrial and provident societies - see CTM40570.