Corporation Tax Act 2010 section 669

Asset ceasing to be held for qualifying purposes etc

Section 669 deals with what happens when a community amateur sports club either loses its registered status or stops holding an asset for qualifying purposes, and the tax consequences that follow for chargeable gains exemptions.

• When a registered club ceases to be registered or stops holding an asset for qualifying purposes without actually disposing of it, the club is treated as having sold and immediately repurchased the asset at its market value at that point
• The chargeable gains exemption under section 665 does not apply to any gain arising on this deemed disposal, meaning the gain becomes chargeable to corporation tax
• If any part of the asset can be traced back to the disposal of another asset by the club, the section 665 exemption is also removed retrospectively from any gain that arose on that earlier disposal
• HMRC may make any necessary adjustments, including raising assessments, but any such assessment must be made within three years of the end of the accounting period in which the cessation occurred