CTM00520 - Introduction: concerns within the charge to CT

CT is charged on the profits of companies, see CTM00510.

An unincorporated association is a company for the purposes of the Corporation Tax Acts, largely reflecting historical origin, see CTM00510.  Unincorporated associations are now mainly members' clubs, see CTM40105, and trade associations, see CTM41200 onwards, but may also carry on businesses.  It is rather that limited companies are more suitable and easy to establish so this is rare.

In general, trustees are not unincorporated associations, because the rules of these associations are incompatible with the principles of equity which apply to trusts.  Guidance on the trustees of an unauthorised unit trust is at SAIM6050.

Authorised unit trusts within CTA10/S616 to S619 are by that staute within the charge to CT, but are subject to special rules, see CTM48200 onwards.

For guidance on the tax treatment of various particular bodies, including clubs, CTM40100, and unincorporated associations generally, CTM41300, see CTM40000 onwards.

Disincorporation

Sometimes the directors and shareholders of a small company will decide that incorporated form is no longer the appropriate vehicle for carrying on a trade.

Disincorporation Relief was introduced from 1 April 2013 and was a form of roll-over or deferral relief.  It allowed a company to transfer certain assets to shareholders who continued its business in an unincorporated form, without the company incurring a Corporation Tax charge on the disposal of those assets by the company.  It was available for transfers made between 1 April 2013 and 31 March 2018.