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Charities Bill [HL]

My Lords, I can see from what the noble Lord, Lord Phillips, has said that I shall have to expand a little on my explanation of the difficulties to which his amendment might give rise for charitable amateur sports clubs wanting to convert to CASC status. There is no doubt that the transition from CASC to Charity Commission would be smoother with this amendment, but in the way in which we are looking at it, we believe that it would create difficulties for a charitable amateur sports club that wished to become a CASC. Under the amendment, a club registered with the Charity Commission cannot be a CASC or become one. The effect of the amendment is that every time a charitable club moves towards, and attempts to assume, CASC status it is pulled back into charity by the amendment tabled by the noble Lord, Lord Phillips, which provides that, as a charity, it ceases automatically to be a CASC. So in order for a charity to become a CASC it would need to cease to be a charity first, so that there was a gap in time between its ceasing to be a charity and its subsequent assumption of CASC status. That would enable it to enter CASC territory as a non-charity. The problem is that, at the point at which it ceased to be a charity, a deemed disposal of assets for capital gains tax purposes would occur, with an associated tax charge that arises because, at that point, the club is not yet sheltered by the tax reliefs available to CASCs. I appreciate that it is somewhat hard to follow. I find it hard to trace too, but it explains why, although there is an attraction to the amendment, it would be unworkable in practice. It is for that reason alone that we continue with our resistance.