1993.This Chapter rewrites section 488 of ICTA. It provides tax rules forco-operative housing associations and an approvals process that underpins those rules. The approvals process has been modified significantly for Scotland and Wales as a result of devolution. The rewritten legislation incorporates these effects.
1994.This sectionprovides that, where an approved housing association makes a claim, any rent that it receives from its members is ignored for tax purposes and any interest that it pays is treated by the association as not payable. It is based on section 488(1) and (2) of ICTA.
1995.The source legislation is based on tax years, but as these bodies are subject to corporation tax it is more appropriate to operate on the basis of accounting periods. Moving to this basis also brings the disregard of rent and interest into line with the chargeable gains exemption in section 643. See Change 46 in Annex 1.
1996.This section exempts an approved housing association from corporation tax on gains on sales of property to its members. It is based on section 488(5) of ICTA.
1997.This section sets out the process by which housing associations are approved for the purposes of this Chapter. It is based on section 488(6) and (7) of ICTA.
1998.Since section 488 of ICTA was enacted, a number of changes to the approvals regime have been made as a result of devolution.
1999.Specified functions have been transferred:
to the Scottish Ministers by the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc) Order 2004 (SI 2004/2030), articles2(1) and 3; and
to the Welsh Ministers by the National Assembly for Wales (Transfer of Functions) Order 1999 (SI 1999/672), article 2 and Schedule 1 and by the Government of Wales Act2006,paragraphs 30(1) and (2) of Schedule 11.
2000.The effects of these modifications are included explicitly in this Chapter.
2001.In order to reflect changes in the responsibilities of the Department of the Environment and the Department for Social Development, the approvals process for Northern Ireland refers to the Department for Social Development instead of the Head of the Department of the Environment for Northern Ireland. See Change 47 in Annex 1.
2002.Subsection (4) provides a signpost to a saving provision in Schedule 2 concerning the concurrent exercise of these functions in relation to Wales by the Secretary of State and the Welsh Ministers where the association is a “cross-border body”.
2003.This section sets out the tests which housing associations have to satisfy in order to be approved for the purposes of this Chapter. It is based on section 488(6) of ICTA.
2004.As mentioned in relation to section 644, since section 488 of ICTA was enacted, a number of changes to the approvals regime have been made as a result of devolution.
2005.So far as exercisable in relation to Wales, the functions under section 488(6) have been transferred to the Welsh Ministers by the National Assembly for Wales (Transfer of Functions) Order 1999 (SI 1999/672), article 2 and Schedule 1 and by the Government of Wales Act 2006, paragraphs 30(1) and(2) of Schedule 11.
2006.Article 5 of the Scotland Act 1988 (Transfer of Functions to the Scottish Ministers etc) Order 2004 (SI 2004/2030) amended section 488(6)(iii). The effect of the amendment on the approvals process for Northern Irelandis discussed inChange 47 in Annex 1.
2007.This section permits the Secretary of State’s functions under section 644 or 645 to be delegated to the Regulator of Social Housing. It is based on section 488(7A) of ICTA.
2008.The Housing and Regeneration Act 2008 established the Regulator of Social Housing in place of the Housing Corporation as the body responsible for regulating social housing in England. This section incorporates the prospective amendments made by paragraph 13 of Schedule 9 to the Housing and Regeneration Act 2008 which come into force from a day to be appointed by Order (section 325(1) of that Act). Until the Order is made this section is subject to the provisions for co-operative housing associations and self-build societies in Schedule 2.
2009.This section sets out the conditions that must be met for a claim under section 642 or 643 to be made. It is based on section 488(9), (10) and (11) of ICTA.
2010.Claims under the source legislation in relation to rent and interest are based on tax years, but as these bodies are subject to corporation tax it is more appropriate to operate on the basis of accounting periods. Moving to this basis also brings those claims into line with the claim for the chargeable gains exemption in section 643. See Change 46 in Annex 1.
2011.This section sets out how adjustments to an association’s corporation tax liability may be made as a result of a claim or an amendment of a claim. It is based on section 488(4) and (11A) of ICTA.
2012.Adjustments under the source legislation as a result of claims in relation to rent and interest may be based on tax years or accounting periods, but as these bodies are subject to corporation tax it is more appropriate to operate on the basis of accounting periods. See Change 46 in Annex 1.
2013.This section sets out the power to make further provision by statutory instrument or, in Northern Ireland, by statutory rule. It is based on section 488(8) of ICTA.
2014.Powers to make regulations under this provision in relation to Wales were transferred to the Welsh Ministers by the National Assembly for Wales (Transfer of Functions) Order 1999 (SI 1999/672), article 2 and Schedule 1 and by the Government of Wales Act 2006, paragraphs 30(1) and (2) of Schedule 11.
2015.In order to reflect changes in the responsibilities of the Department of the Environment and the Department for Social Development,the powers to make regulations under this provision for the purposes of housing associations in Northern Ireland refer to the Department for Social Development rather than the Head of the Department of the Environment for Northern Ireland. See Change 47 in Annex 1.