Not just for charity

The company a registered social landlord was incorporated in 2001 and traded on a not-for-profit basis. In 2004 it changed its memorandum and articles and registered as a charity.

HMRC ruled that during the period 2001 to 2004 the company had not been acting for charitable purposes for corporation tax purposes and assessed it to corporation tax.

The company appealed.

The First-tier Tribunal held that the taxpayer’s main activities in the period had been the acquisition of housing stock its refurbishment and subsequent letting to tenants and concluded it had not been acting for a charitable purpose.

The Upper Tribunal agreed so the taxpayer appealed saying its activities benefited the community and were charitable.

The Court of Appeal found that the company did not act for the community to the exclusion of non-incidental benefit for individuals. The company had incorporated into its...