A West Country council transferred its 3516 homes to a housing association this week despite fears that the new landlord could lose £2m in a tax row.
Teign Housing was launched on Monday but could be hit by a Inland Revenue decision on VAT shelters.

The Revenue has ruled that non-charitable transfer associations that have VAT shelters will no longer be able to offset the cost of repairs to some homes against corporation tax (HT 21 November 2003, page 14).

The decision could cost the sector hundreds of millions of pounds.

At this stage, becoming a charity is not something we want to do

Jo Reece, Teign Housing

Teign Housing would save £10m through its VAT shelter but would have to pay £12m in corporation tax.

Teignbridge council had delayed the transfer for a month while it waited for the decision from the Inland Revenue.

Source

Housing Today