Analysis
The appellant, a company limited by guarantee and not having a share capital, was a registered social landlord. Originally incorporated in January 2001, the appellant was registered as a charity on changing its memorandum and articles of association in November 2004. However, unless the appellant could establish that its objects were carried on for exclusively charitable purposes during the prior period from October 2001 to November 2004 there was a liability on rents received of £6m in corporation tax due to the respondent. The objects were the provision of housing, accommodation, assistance to help house people, associated facilities and amenities, and any other object that could be carried out by a company registered as a social landlord with the Housing Corporation for the benefit of the community. By reference to s2 of the Housing Act 1996, a body was eligible for registration as a social landlord if it was a registered charity housing association, a society registered under the Industrial and Provident Societies Act 1965 or a company registered under the Companies Act 1985, which in either case satisfied the conditions of subsection (2). Those conditions were that the body was non-profit making and established for the purpose of, or had among its objects or powers, the provision, construction, improvement or management of houses to be kept available for letting, houses for occupation by members of the body where the rules restricted membership to persons entitled to occupy houses provided or managed by the body, or hostels and that any additional purposes or objects were among those specified in subsection (4). Those additional purposes or objects were:
- (a) the provision of the land, amenities or services, or the provision, construction, repair or improvement of buildings, for its residents, either exclusively or together with other persons;
- (b) the acquisition, or repair and improvement, or creation by the conversion of houses or other property, of houses to be disposed of on sale, or on lease or on shared ownership terms;
- (c) the construction of houses to be disposed of on shared ownership terms;
- (d) the management of houses held on lease or other lettings or blocks of flats;
- (e) the provision of services of any description for owners or occupiers of houses in arranging or carrying out works of maintenance, repair or improvement, or encouraging or facilitating the carrying out of such works; and
- (f) the encouragement and giving of advice on the formation of housing associations or providing services for, and giving advice on the running of, such associations and other voluntary organisations concerned with housing, or matters connected with housing.
The appellant appealed against assessments to tax made by the respondent, firstly to the First Tier Tribunal (which was dismissed by Judge Michael Tildesley on 1 February 2010), and then to the Upper Tribunal (Tax and Chancery Chamber), which was dismissed by Mr Justice Warren and Judge Alison McKenna in April 2011. The appellant was granted permission to appeal by Lord Neuberger MR and, because of his interest in charity generally, the attorney-general was represented as intervener.
Held (dismissing the appeal):
The appellant had to show that its objects, all of which were independent of each other, concerned as they were with the provision of housing accommodation, were beneficial to the community in the relevant geographical area and exclusively charitable as being of general public utility. However, those objects would only be instances of liberality, rather than of charity, unless it could also be shown that they were, directly or by analogy, within the spirit and intendment of the preamble to the Statute of Charitable Uses 1601. On both points it failed. Firstly, the incorporation into the objects of the additional purposes permitted by s2(4) of the Housing Act 1996, particularly those listed at paras (b), (d), (e) as regards owners and (f) were not on their true construction limited to purposes which were beneficial to the community, to the exclusion of non-incidental benefit for individuals, and therefore not exclusively charitable. Furthermore, even if the objects were so limited, the provision of housing accommodation per se, otherwise than for the relief of need (such as poverty or old age) was not either directly or by analogy within the spirit and intendment of the preamble to the statute and, moreover, the degree of individual benefit afforded by the provision of housing was so substantial that it could not properly be regarded as subordinate to the public benefit of the availability of a stock of suitable housing.
JUDGMENT LORD JUSTICE LLOYD: Introduction [1] Helena Partnerships Ltd (Helena) is a registered social landlord. It was incorporated in January 2001, but in October 2001 it adopted a new memorandum of association and new articles. Its objects were then the business of providing housing, accommodation, assistance to help house people, and associated facilities and amenities, …Continue reading "Helena Partnerships Ltd v HMRC & anr [2012] EWCA Civ 569"