Introduction Details of the Sections Section 151 – Charitable companies
294.Subsection (1) provides that a charitable company is not treated as meeting the ownership condition when it holds the interest in the dwelling if it holds that interest for charitable purposes. However, where the conditions set out in subsection (3) are met then the day will be treated as an “excluded day” and tax will be charged.
295.Subsection (2) defines charitable purposes as use for the charitable purposes of the charitable company or another charity, or as an investment from which the profits are applied to the charitable purposes of the company.
296.Subsection (3) sets out the conditions that lead to a particular day in a chargeable period being an “excluded day”. The conditions are that: “the donor” has made or agreed to make a gift to the charitable company, arrangements have been entered into whereby the donor or a person linked to them is permitted (or will be permitted) to occupy the dwelling, and it is reasonable to assume that the arrangements and the gift would not have been entered into independently of each other.
297.Subsection (4) defines a “linked individual”. A linked individual means either the donor or a person who was, when the arrangements were entered into, an associate of the donor. An associate for the purposes of section 151 is defined in section 152.
298.Subsection (5) provides exclusions from the “excluded day” rules where one of the three conditions set out in the subsection is met. Those three conditions are: that the primary purpose of the charitable company includes opening the dwelling to the public, that the dwelling is being exploited commercially by being opened to the public, or, the dwelling will be opened to the public or sold without undue delay.
299.Subsection (6) defines “opening the dwelling to the public” and “without undue delay”.
300.Subsection (7) provides that for the purposes of subsection 6(a), the factors to be considered in establishing whether the condition is met are the size, nature and function of the areas concerned, to be taken into account in determining whether they form a significant part of the interior of the dwelling or of the garden or grounds.
301.Subsection (8) defines connected for this case as connected in a matter relating to the structure, administration or control of the charity, rather than the definition used in section 172.