Are there any fellow STEP members who are able to assist with this?
I am a member of a club that operates as an unincorporated association. It owns a small parcel of land, the legal title is held by two club members, as trustees, and is properly registered in their names at Land Registry.
The land does not generate any income. It is simply used by the members for recreational activities. It is never likely to generate any tax liability.
I do not know if there is a trust deed, but can find out.
I have researched the list of exemptions on the HMRC website and the closest match is where one partner holds land on behalf of all partners in a partnership. The club is not a partnership, it is an unincorporated association.
The question is whether the trust is exempt from registration?
The land of a UA is inevitably going to be held on trust. This may be an implied trust and so not registrable. If express it is likely to be registrable as non-taxable trust because almost certainly the legal owners on the title will hold for more than themselves s ito will not be excluded. Drafting a trust is tricky as it must be for the members of the association for the time being (a fluctuating body works for certainty) and not just for current members, which would exclude future members, or for current and future members, void for uncertainty. So locating the trust deed if any is a must.
It is possible for there to be no trust at all: Neville Estates Ltd Neville Estates Ltd v Madden (1962) Ch 832. If no specific trust exists over an association’s property, it is possible for it to be held subject to the members’ respective contractual rights and liabilities. It is most unusual for land as opposed to other assets to be owned like this, Though not definitive if it is registered the title will have a form A restriction.
The UA will be a taxable trust and so registrable, even if not express, if it has taxable income, subject to a threshold of ÂŁ500 in a year from 6 April 2024: Part 2 Sch 2 F(No 2) A 2023.