Readers’ forum: Tax concerns for friendly society transferring property

Friendly society

My client is a social club and institute (WSC) that is classified as a friendly society. There is a trustee who ‘owns’ the property and a management committee that looks after the building.

The original property was purchased in 1864 for £800 and consisted of a two storey property which has since been developed to a three storey building complex. The property is on the balance sheet of the friendly society. The remaining book cost is £15 000.

Although its insurance value is £4m its true value is probably £500 000. The only income is from hire and rentals.

WSC is not a trading concern and does not have any income associated with a friendly society. My client has tried for grants but this requires a charitable status which has been refused.

If the property is transferred to a company limited by guarantee or a community...