CTM40975 - Particular Trades: mutual concerns: distributions

ICTA88/S490 (1) & (3)

A mutual trading company will have to pay ACT on the distributions it makes before 6 April 1999 to its members if they are:

• profits on which CT should be paid,
• franked investment income, which in these cases includes group income,
• FID.

Any other distributions, such as a surplus from mutual trading, are not liable to ACT. However they will be counted as trading receipts if the person who receives them does so because of the trade they carry on. This is covered in BIM24555 onwards.

ACT is not payable by a company on distributions made on or after 6 April 1999.

If you are unsure how to apply ICTA88/S490 in any case, consult CT&VAT (Technical).