# Advice on trading subsidiaries using a charity's premises

- Link: https://fundraising.co.uk/2004/03/01/advice-trading-subsidiaries-using-charity039s-premises/
- Published: 2004-03-01T00:00:00+00:00
- Author: Howard Lake

Charities will continue to need to use trading subsidiaries for the indefinite future
as the government has turned down proposals to allow charities to trade, according
to solicitors Russell Cooke.
In their latest e-mail newsletter to clients, charity
law specialists Russell Cooke report advise on how charities’ trading subsidiaries
might share a charity’s premises.

“Initially a trading subsidiary may occupy a relatively small part of a charity’s
premises and it may be appropriate to use a licence to document the shared use”,
advises James Sinclair Taylor at Russell Cooke. “Even then, a full market level 
fee must be charged. This applies even if the charity is not paying any rent itself.”

As the trading subsidiary grows, they advise that it should be granted a lease at
full market rent. However, such leases must be granted with the Charity Commission’s
consent and be approved by the charity’s trustees.

## Advertisement

There are also VAT implications when letting to a business: Russell Cooke warn that“
where the use is substantial it may put the charity’s exemption from business rates
at risk.”

 * **[Blackbaud Inc to float](https://fundraising.co.uk/2004/03/04/blackbaud-inc-float/)**(
   4 March 2004)
 * **[GuideStar UK starts to publish online](https://fundraising.co.uk/2004/03/07/guidestar-uk-starts-publish-online/)**(
   7 March 2004)
 * **[BT says give by direct debit and donate savings to ChildLine](https://fundraising.co.uk/2004/03/08/bt-says-give-direct-debit-and-donate-savings-childline/)**(
   8 March 2004)