500. Clubs and societies.

Members' clubs and societies, where the members are also the owners of any assets and the facilities are not available to non-members, are not liable to income tax on trading income1, or corporation tax, because they do not carry on a trade. They are liable to tax on interest, dividends and rents under the appropriate statutory provisions. This is the case even where the members have formed a company and surplus subscriptions are carried to reserve and not immediately returned2.

It is necessary that the contributors should be the same people as those entitled to share in the surplus3. If