CTM40585 - Particular bodies: industrial and provident societies: conversion to Companies Act company

Where an industrial and provident society converts to a Companies Act company under Section 52 of the Industrial and Provident Societies Act 1965, this does not cause one entity to cease and another to come into being. They are treated as the same entity both before and after the conversion. Clearly however ICTA88/S486 will no longer apply from the date of conversion.

Such a conversion does not give rise to any deemed or actual disposal of chargeable assets by either the society or its members, or the receipt of any income. However, the provisions of TCGA92/S126 to S130 (reorganisation of share capital) should be borne in mind (CG51700+).

It follows that where an industrial and provident society is a principal member of a group, a conversion will not stop it being the principal member of that group. Furthermore, where the industrial and provident society had acquired an asset in an intra-group transaction, the conversion will not lead to an occasion of charge for CG purposes.