Payments made by UK agricultural or fishing co-operativesU.K.
1057UK agricultural or fishing co-operatives: interest and share dividendsU.K.
(1)Interest paid by a UK agricultural or fishing co-operative in respect of a mortgage, loan, loan stock or deposit is not a distribution for corporation tax purposes.
(2)If any dividend, bonus, interest or other sum—
(a)is paid to a shareholder in a UK agricultural or fishing co-operative, and
(b)is payable by reference to the amount of the shareholder's holding in the co-operative's share capital,
it is not a distribution for corporation tax purposes.
(3)Subsections (1) and (2) apply even if the amount in question would otherwise be a distribution by virtue of any enactment relating to corporation tax.
(4)For the purposes of this section crediting an amount counts as paying it.
(5)See also section 379(1) of ITTOIA 2005 (income tax treatment of sums payable as mentioned in subsection (2)).
1058Meaning of “UK agricultural or fishing co-operative”U.K.
(1)In section 1057 “UK agricultural or fishing co-operative” means a co-operative association—
(a)which is established in the United Kingdom and UK resident, and
(b)whose primary object is assisting its members in—
(i)carrying on agricultural or horticultural businesses on land occupied by them in the United Kingdom, or
(ii)carrying on businesses consisting of the catching or taking of fish or shellfish.
(2)In subsection (1) “co-operative association” means a body with a written constitution from which the Secretary of State is satisfied that it is in substance a co-operative association.
(3)For the purposes of subsection (2) the Secretary of State must have regard to the way in which the body's constitution provides for its income to be applied for its members' benefit, and all other relevant provisions.
(4)In Northern Ireland subsections (2) and (3) apply with the substitution for “the Secretary of State” of “the Department of Agriculture and Rural Development”.