CTM40560 - Particular bodies: industrial and provident societies: payments not treated as distributions

ICTA88/S486 (1) & (11)

The following are not treated as distributions for CT purposes:

• Share and loan interest paid by a registered industrial and provident society. These terms are defined in Section 486 (12) as follows:
• • 'share interest' means any interest, dividend, bonus or other sum payable to a shareholder of the society by reference to the amount of his holding in the share capital of the society;
  • 'loan interest' means any interest payable by the society in respect of any mortgage, loan, loan stock or deposit;

(Note that Section 486 (12) also states that references to the payment of share interest or loan interest include references to the crediting of such interest.)

• Any dividend or bonus within ICTA88/S486 (10) granted to members of a trading society (for example, the co-operative 'divi' - see CTM40515).

Consequently, prior to the abolition of the ACT regime with effect from 6 April 1999, there would normally be no qualifying distributions in respect of which an industrial and provident society was required to account for ACT under ICTA88/SCH14.