Charitable trust

Our client is a charitable trust which holds a property that is used as a temple and community centre. It also holds two investment properties which produce rental income of £13 000.

There is a governing document and the trustees and management committee are elected by the 900 or so members.

The trustees wish to incorporate using a charitable incorporated organisation (CIO). The original trust will remain and will let the temple and community centre property to the new CIO at a peppercorn rent and will continue to receive the rent from the investment properties.

My concern is that the original trust may not be considered as providing charitable services and the rental income would be subject to tax.

Query 18 566 – Adviser

Reply from Steve Kesby

I think Adviser needs to ascertain exactly what it is that the trustees are trying to achieve. A charitable incorporated...