Finance Act 2022

47 Non-profit housing companies: exit charge

(1) This section applies where—

(a) a company (“A”) ceases to be a non-profit housing company by virtue of any of paragraphs (a) to (d) of section 34(4), and

(b) not all of the assets of the company have been distributed to another non-profit housing company or companies before the end of the relevant period.

(2) For the purposes of subsection (1) the relevant period is the period beginning with the day on which A ceases to be a non-profit housing company and ending on—

(a) the first anniversary of the last day of the accounting period in which A ceased to be a non-profit housing company, or

(b) such later day as an officer of Revenue and Customs may allow.

(3) This section also applies where—

(a) a non-profit housing company (“A”) ceases to be a non-profit housing company by virtue of section 34(4)(e) when it ceases to be a wholly owned subsidiary of another non-profit housing company (“B”), and

(b) an interest in A is acquired by a company that—

(i) controls, or is under the same control as, B, and

(ii) is not a non-profit housing company.

(4) For the purposes of RPDT—

(a) A is not to be treated as a non-profit housing company for the accounting period (“the exit period”) in which it ceased to be a non-profit housing company or a wholly owned subsidiary of another non-profit housing company,

(b) A’s RPD profits for the exit period are the total of what would have been A’s, and (subject to subsection (5)(b)) any of A’s wholly owned subsidiaries’, chargeable amounts for accounting periods ending in the period (“the exit charge period”)—

(i) beginning with the day (“the starting day”) four years before the day on which A ceased to be a non-profit housing company or a wholly owned subsidiary of another non-profit housing company, and

(ii) ending with the last day of the exit period,

if, throughout the exit charge period, A had not been a non-profit housing company, and

(c) A’s allowance in respect of the exit period is £0.

(5) For the purposes of subsection (4)(b)—

(a) “chargeable amount” means the amount of RPD profits in excess of what would have been A’s, or A’s wholly owned subsidiaries’, allowance, but

(b) RPD profits of any of A’s wholly owned subsidiaries (“subsidiary profits”) are not to be taken into account for the purposes of calculating A’s chargeable amount so far as those subsidiary profits are separately charged to RPDT as a result of this section applying by virtue of subsection (3).

(6) Where A, or any of A’s wholly owned subsidiaries, has an accounting period beginning before the starting day and ending on or after that date (“the straddling period”), the following subsections apply for the purposes of subsection (4)(b).

(7) For the purposes of determining what would have been A’s, or A’s wholly owned subsidiaries’, RPD profits for the straddling period and, if so, in what amount—

(a) so much of the straddling period as falls before the starting day, and

(b) so much of that period as falls on or after that date,

are to be treated as separate accounting periods.

(8) If it is necessary to apportion an amount for the straddling period to the two separate accounting periods, see section 1172 of CTA 2010 (which applies as a result of section 45).