Income and Corporation Taxes Act 1988

CHAPTER IV U.K. BUILDING SOCIETIES, BANKS, SAVINGS BANKS, INDUSTRIAL AND PROVIDENT SOCIETIES AND OTHERS

476 Building societies: regulations for payment of tax. U.K.

F1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 S. 476 repealed by Finance Act 1990 (c. 29), Sch. 5 para. 2, Sch. 19 Pt. 4, Note 8

477 Investments becoming or ceasing to be relevant building society investments. U.K.

F2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2 S. 477 repealed by Finance Act 1990 (c. 29), Sch. 5 para. 3, Sch. 19 Pt. 4, Note 8

[F4 477A Building societies: [F3 loan relationships]. U.K.

(1) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F6 (1A) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(2) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F7 (2A) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(3) F8 . . . Dividends or interest payable in respect of shares in, or deposits with or loans to, a building society shall be dealt with for the purposes of corporation tax as follows—

[F9 (a) [F10 to the extent that it would not otherwise fall to be so regarded,] liability to pay the dividends or interest shall be treated for the purposes of Chapter II of Part IV of the Finance Act 1996 as a liability arising under a loan relationship of the building society;

(aa) if the dividends or interest are payable to a company, [F11 then, to the extent that they would not otherwise fall to be so regarded,] they shall be treated for those purposes as payable to that company in pursuance of a right arising under a loan relationship of that company;]

(b) no part of any such dividends or interest F12 . . . shall be treated as a distribution of the society or as franked investment income of any company resident in the United Kingdom.

[F13 (3A) F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3B) F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3C) F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(4) Subsection (3)(a) above shall apply to any [F15 interest] paid by the society under a certified [F16 SAYE savings arrangement] as if it were a dividend on a share in the society.

(5) F17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) F18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F20 (9) In this section “dividend” includes any distribution (whether or not described as a dividend).]

[F21 (10) In this section—

• [F22 “certified SAYE savings arrangement” has the meaning given by section 703 of ITTOIA 2005

• F23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

• F24 F23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]]

Textual Amendments

F3 Words in s. 477A sidenote substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(7) (with Sch. 2)

F4 S. 477A inserted (with effect in accordance with Sch. 5 para. 4(2) of the amending Act) by Finance Act 1990 (c. 29), Sch. 5 para. 4(1)

F5 S. 477A(1)-(2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(2), Sch. 3 Pt. 1 (with Sch. 2)

F6 S. 477A(1A) inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 52(1), Sch. 11 para. 2(2)

F7 S. 477A(2A) inserted (28.7.2000) by Finance Act 2000 (c. 17), s. 111(4)

F8 Words in s. 477A(3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(3)(a), Sch. 3 Pt. 1 (with Sch. 2)

F9 S. 477A(3)(a)(aa) substituted for s. 477A(3)(a) (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 28(1) (with Sch. 15)

F10 Words in s. 477A(3)(a) inserted (with effect in accordance with s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), Sch. 25 para. 47(2)

F11 Words in s. 477A(3)(aa) inserted (with effect in accordance with s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), Sch. 25 para. 47(3)

F12 Words in s. 477A(3)(b) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(3)(b), Sch. 3 Pt. 1 (with Sch. 2)

F13 S. 477A(3A)-(3C) inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 52(2)(3)

F14 S. 477(3A)-(3C) repealed with effect in accordance with s. 105(1) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 14 para. 28(2), Sch. 41 Pt. 5(3), Note (with Sch. 15)

F15 Words in s. 477A(4) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 184(2)(a) (with Sch. 2)

F16 Words in s. 477A(4) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 184(2)(b) (with Sch. 2)

F17 S. 477A(5)(6) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 184(3), Sch. 3 (with Sch. 2)

F18 S. 477A(7) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(4), Sch. 3 Pt. 1 (with Sch. 2)

F19 S. 477(8) repealed (with effect in accordance with s. 38(3)(4) of the repealing Act) by Finance Act 1999 (c. 16), Sch. 20 Pt. 3(7), Note 4

F20 S. 477A(9) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(5) (with Sch. 2)

F21 S. 477A(10) inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 52(1), Sch. 11 para. 2(3)

F22 S. 477A(10): definition of "certified SAYE savings arrangement" inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 184(5) (with Sch. 2)

F23 S. 477A(10): definitions of "qualifying certificate of deposit", "qualifying deposit right" and "security" repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(6), Sch. 3 Pt. 1 (with Sch. 2)

F24 S. 477A(10): definition of "qualifying deposit right" inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 34, Sch. 8 paras. 3(3), 6

Modifications etc. (not altering text)

C1 S. 477A applied (with effect in accordance with s. 56 of the affecting Act) by Finance Act 2005 (c. 7), Sch. 2 para,. 5

C2 See 1990 Sch.5 para.16(1), (4), (5)—for the year 1991-92,the words from

“actual”

to the end of the paragraph are replaced by

“appropriate amount”;and the following subs. is inserted after subs.(3):— “(3A) In subsection (3)(a) above the reference to the appropriate amount is to the actual amount paid or credited in the accounting period of any such dividends or interest together with—(a) in the case of dividends or interest paid or credited in the year 1990-91, any amount accounted for and paid by the society in respect thereof as representing income tax, and (b) in the case of dividends or interest paid or credited in the year 1991-92, any amount of income tax accounted for and paid by the society in respect thereof.”

[F25 477B Building societies: incidental costs of issuing qualifying shares. U.K.

(1) In computing for the purposes of corporation tax the income of a building society from the trade carried on by it, there shall be allowed as a deduction, if subsection (2) below applies, the incidental costs of obtaining finance by means of issuing shares in the society which are qualifying shares.

[F26 (1A) A deduction shall not be allowed by virtue of subsection (1) above to the extent that the costs in question fall to be brought into account as debits for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships).]

(2) This subsection applies if any amount payable in respect of the shares by way of dividend or interest is deductible in computing for the purposes of corporation tax the income of the society from the trade carried on by it.

(3) In subsection (1) above, “the incidental costs of obtaining finance” means expenditure on fees, commissions, advertising, printing and other incidental matters (but not including stamp duty), being expenditure wholly and exclusively incurred for the purpose of obtaining the finance (whether or not it is in fact obtained), or of providing security for it or of repaying it.

(4) This section shall not be construed as affording relief—

(a) for any sums paid in consequence of, or for obtaining protection against, losses resulting from changes in the rate of exchange between different currencies, or

(b) for the cost of repaying qualifying shares so far as attributable to their being repayable at a premium or to their having been issued at a discount.

(5) In this section—

• “dividend” has the same meaning as in section 477A, and

• “qualifying share” has the same meaning as in section [F27 117(4) of the 1992 Act]].

Textual Amendments

F25 S. 477B inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 51, Sch. 10 para. 3(1)(2)

F26 S. 477B(1A) inserted (with effect in accordance with s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), Sch. 25 para. 48

F27 Words in s. 477B(5) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290(1), Sch. 10 para. 14(28) (with ss. 60, 101(1), 171, 201(3))

478 Building societies: time for payment of tax. U.K.

F28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F28 S. 478 repealed (with effect in accordance with s. 199(2) of the repealing Act) by Finance Act 1994 (c. 9), Sch. 26 Pt. 5(23), Note 4; S.I. 1998/3173, art. 2

479 Interest paid on deposits with banks etc. U.K.

F29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F29 S. 479 repealed by Finance Act 1990 (c. 29), Sch. 5 para. 5, Sch. 19 Pt. 4, Note 8

480 Deposits becoming or ceasing to be composite rate deposits. U.K.

F30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F30 S. 480 repealed by Finance Act 1990 (c. 29), Sch. 5 para. 6, Sch. 19 Pt. 4, Note 8

[F31 480A Relevant deposits: deduction of tax from interest payments. U.K.

F32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F31 Ss. 480A-480C inserted (with effect in accordance with Sch. 5 para. 7(2) of the amending Act) by Finance Act 1990 (c. 29), Sch. 5 para. 7(1)

F32 Ss. 480A-482 repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 89, Sch. 3 Pt. 1 (with Sch. 2)

[F33 480B Relevant deposits: exception from section 480A. U.K.

F34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F33 Ss. 480A-480C inserted (with effect in accordance with Sch. 5 para. 7(2) of the amending Act) by Finance Act 1990 (c. 29), Sch. 5 para. 7(1)

F34 Ss. 480A-482 repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 89, Sch. 3 Pt. 1 (with Sch. 2)

[F35 480C Relevant deposits: computation of tax on interest. U.K.

F36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F35 Ss. 480A-480C inserted (with effect in accordance with Sch. 5 para. 7(2) of the amending Act) by Finance Act 1990 (c. 29), Sch. 5 para. 7(1)

F36 S. 480C repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 185, Sch. 3 (with Sch. 2)

481 “Deposit-taker”, “deposit” and “relevant deposit”. U.K.

F37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F37 Ss. 480A-482 repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 89, Sch. 3 Pt. 1 (with Sch. 2)

482 Supplementary provisions. U.K.

F38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F38 Ss. 480A-482 repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 89, Sch. 3 Pt. 1 (with Sch. 2)

[F39 482A Audit powers in relation to non-residents. U.K.

F40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F39 S. 482A inserted by Finance Act 1991 (c. 31, SIF 63:1), s.75

F40 S. 482A repealed (with effect in accordance with s. 145(11), Sch. 40 Pt. 5 Note of the repealing Act) by Finance Act 2000 (c. 17), s. 145(10), Sch. 40 Pt. 5

483 Determination of reduced rate for building societies and composite rate for banks etc. U.K.

F41 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F41 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F41 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) If the order made under section 26 of the Finance Act 1984 in the year 1987-88 is made in pursuance of subsection (4) of that section, that order shall, notwithstanding that that subsection is not re-enacted by this Act, apply for the purposes of sections 476 and 479 for the year 1988-89.

F41 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F41 S. 483(1)-(3)(5) repealed by Finance Act 1990 (c. 29), Sch. 5 para. 12, Sch. 19 Part IV, Note 8

484 Savings banks: exemption from tax. U.K.

F42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F42 S. 484 repealed (with effect in accordance with s. 105(1) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 14 para 29, Sch. 41 Pt. 5(3), Note (with Sch. 15)

485 Savings banks: supplemental. U.K.

F43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F43 S. 485 repealed (with effect in accordance with s. 105(1) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 14 para. 29, Sch. 41 Pt. 5(3), Note (with Sch. 15)

486 Industrial and provident societies and co-operative associations. U.K.

(1) M1 Notwithstanding anything in the Tax Acts, share interest or loan interest paid by a registered industrial and provident society shall not be treated as a distribution [F44 for the purposes of corporation tax]; [F45 but interest payable by such a society (whether as share interest or loan interest) shall be treated for [F46 those purposes] as interest under a loan relationship of the society.]

(2) F47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) F47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Any share interest or loan interest paid by a registered industrial and provident society shall be chargeable under Case III of Schedule D [F48 for the purposes of corporation tax].

(5) F49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) If for any accounting period a return under [F50 section 887(2) of ITA 2007] above is not duly made by a registered industrial and provident society, share and loan interest paid by the society in that period shall [F51 not be brought into account in that period for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).]

(8) If in the course of, or as part of, a union or amalgamation of two or more registered industrial and provident societies, or a transfer of engagements from one registered industrial and provident society to another, there is a disposal of an asset by one society to another, both shall be treated for the purposes of corporation tax in respect of chargeable gains as if the asset were acquired from the society making the disposal for a consideration of such amount as would secure that neither a gain nor a loss would accrue to that society on the disposal.

(9) Subsections (1) and (8) above shall have effect as if references to a registered industrial and provident society included any co-operative association established and resident in the United Kingdom, and having as its object or primary object to assist its members in the carrying on of agricultural or horticultural businesses on land occupied by them in the United Kingdom or in the carrying on of businesses consisting in the catching or taking of fish or shellfish.

(10) It is hereby declared that, in computing, for the purposes of any provision of the Tax Acts relating to [F52 profits] chargeable under Case I of Schedule D (“the tax computation”), any [F52 profits] of—

(a) any registered industrial and provident society which does not sell to persons not members thereof; or

(b) any registered industrial and provident society the number of the shares in which is not limited by its rules or practice;

there are to be deducted as expenses any sums which—

(i) represent a discount, rebate, dividend or bonus granted by the company to members or other persons in respect of amounts paid or payable by or to them on account of their transactions with the company, being transactions which are taken into account in the tax computation; and

(ii) are calculated by reference to those amounts or to the magnitude of those transactions and not by reference to the amount of any share or interest in the capital of the company.

(11) No dividends or bonus deductible in computing income as mentioned in subsection (10) above shall be regarded as a distribution.

(12) In this section—

• “co-operative association” means a body of persons having a written constitution from which the Minister is satisfied, having regard to the provision made as to the manner in which the income of the body is to be applied for the benefit of its members and all other relevant provisions, that the body is in substance a co-operative association;

• “the Minister” means—

• the [F53 Secretary of State], as regards England and Wales;

• the Secretary of State, as regards Scotland; and

• the Department of Agriculture for Northern Ireland, as regards Northern Ireland;

• [F54 “registered industrial and provident society” means—

  (a)

  a society registered or deemed to be registered under the M2 Industrial and Provident Societies Act 1965 or under the M3 Industrial and Provident Societies Act (Northern Ireland) 1969, or

  (b)

  an SCE formed in accordance with M4 Council Regulation (EC) 1435/2003 on the Statute for a European Co-Operative Society;]

• “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;

and references to the payment of share interest or loan interest include references to the crediting of such interest.

Textual Amendments

F44 Words in s. 486(1) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 188(2)(a) (with Sch. 2)

F45 Words in s. 486(1) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 30(a) (with Sch. 15)

F46 Words in s. 486(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 188(2)(b) (with Sch. 2)

F47 S. 486(2)(3)(6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 90(2), Sch. 3 Pt. 1 (with Sch. 2)

F48 Words in s. 486(4) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 188(3) (with Sch. 2)

F49 S. 486(5) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 188(4), Sch. 3 (with Sch. 2)

F50 Words in s. 486(7) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 90(3) (with Sch. 2)

F51 Words in s. 486(7) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 30(b) (with Sch. 15)

F52 Words in s. 486(10) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a), Sch. 7 para. 1

F53 Words in s. 486(12) substituted (27.3.2002) by The Ministry of Agriculture, Fisheries and Food (Dissolution) Order 2002 (S.I. 2002/794), art. 1(2), Sch. 1 para. 31

F54 S. 486(12): definition of "registered industrial and provident society" substituted (29.11.2007) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 2 para. 16

Modifications etc. (not altering text)

C3 See 1988(F) Sch.8 para.1—re-basing to 1982.

C4 S. 486(8) excluded (with effect in accordance with s. 131(4) of the affecting Act) by Finance Act 1995 (c. 4), s. 131(1)(2)(b)

C5 S. 486(8) excluded by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 117A(7)(8)(b), 117B(5)(6)(b) (as inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 62 (with Sch. 15))

Marginal Citations

M1 Source—1970 s.340, 345; CUA 1979 s.25(2)

M2 1965 c. 12.

M3 1969 c. 24 (N.I.).

M4 OJ L 207, 18.8.2003. p1.

487 Credit unions. U.K.

(1) M5 Subject to subsection (2) below, in computing for the purposes of corporation tax the income of a credit union for any accounting period—

(a) neither the activity of the credit union in making loans to its members nor in placing on deposit or otherwise investing from time to time its surplus funds shall be regarded as the carrying on of a trade or part of a trade; and

[F55 (b) no credits shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a credit union as respects which a member of the union stands in the position of a debtor as respects the debt in question.]

(2) Paragraph (b) of subsection (1) above shall not apply to an accounting period of a credit union for which the credit union is obliged to make a return under [F56 section 887(2) of ITA 2007] and has not done so within three months after the end of that accounting period or such longer period as the inspector shall allow.

(3) [F57 An annuity or other annual payment (not being a payment of share interest or loan interest) which is] paid or payable by a credit union in any accounting period shall [F58 not] be deductible in computing for the purposes of corporation tax the income of the credit union for that period from any trade carried on by it F59 . . . .

[F60 (3A) No debits shall be brought into account for the purposes of Chapter II of Part IV of the Finance Act 1996 in respect of any loan relationship of a credit union as respects which a member of the union stands in the position of a creditor as respects the debt in question.]

(4) A credit union shall not be regarded as [F61 a company with investment business] for the purposes of section 75 above or [F62 Part 2 of the Capital Allowances Act (plant and machinery allowances)].

(5) In this section—

• “credit union” means a society registered as a credit union under the M6 Industrial and Provident Societies Act 1965 or the M7 Credit Unions (Northern Ireland) Order 1985;

• “share interest” and “loan interest” have the same meaning as in section 486;

• “surplus funds”, in relation to a credit union, means funds not immediately required for its purposes;

and references to the payment of share interest or loan interest include references to the crediting of such interest.

Textual Amendments

F55 S. 487(1)(b) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 31(1) (with Sch. 15)

F56 Words in s. 487(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 91 (with Sch. 2)

F57 Words in s. 487(3) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 31(2)(a) (with Sch. 15)

F58 Word in s. 487(3) inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 31(2)(b) (with Sch. 15)

F59 Words in s. 487(3) repealed (with effect in accordance with s. 38 of the repealing Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 11 Pt. 2(7), Note

F60 S. 487(3A) inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 31(3) (with Sch. 15)

F61 Words in s. 487(4) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 2, Sch. para. 22

F62 Words in s. 487(4) substituted (with effect in accordance with s. 579 of the amending Act) by Capital Allowances Act 2001 (c. 2), Sch. 2 para. 40

Marginal Citations

M5 Source—1970 s.340A; CUA 1979 s.25(1)

M6 1965 c. 12.

M7 S.I. 1985/1205 (N.I. 12.).

488 Co-operative housing associations. U.K.

(1) Where a housing association makes a claim in that behalf for any year or part of a year of assessment during which the association was approved for the purposes of this section—

(a) M8 rent to which the association was entitled from its members for the year or part shall be disregarded for tax purposes; and

(b) any yearly interest payable by the association for the year or part shall be treated for tax purposes [F63 in relation to the association as if there were no interest so payable].

(c) F64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Where the property, or any of the properties, to which any such interest as is mentioned in paragraph (b) of subsection (1) above relates is for any period not subject to a tenancy—

(a) that paragraph shall not apply in relation to so much of the interest as is attributable to the property not subject to a tenancy;F65 . . .

(b) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) F66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Where a claim under subsection (1) above has effect, any adjustment of the liability to tax of F67 . . . the association which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.

(5) Where a housing association makes a claim in that behalf for an accounting period or part of an accounting period during which it was approved for the purposes of this section, the housing association shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part on the disposal by way of sale of any property which has been or is being occupied by a tenant of the housing association.

(6) References in this section to the approval of an association shall be construed as references to approval—

(a) by the Secretary of State in the case of a housing association in Great Britain;

(b) by the Head of the Department of the Environment for Northern Ireland in the case of a housing association in Northern Ireland;

and an association shall not be approved unless the approving authority is satisfied—

(i) that the association is, or is deemed to be, duly registered under the M9 Industrial and Provident Societies Act 1965 or the M10 Industrial and Provident Societies Act (Northern Ireland) 1969, and is a housing association within the meaning of the M11 Housing Associations Act 1985 or [F68 Article 3 of the Housing (Northern Ireland) Order 1992];

(ii) that the rules of the association restrict membership to persons who are tenants or prospective tenants of the association, and preclude the granting or assignment (or, in Scotland, the granting or assignation) of tenancies to persons other than members; and

(iii) that the association satisfies such other requirements as may be prescribed by [F69 the Secretary of State as respects Great Britain, or the Head of the Department for Social Development for Northern Ireland as respects Northern Ireland], and will comply with such conditions as may for the time being be so prescribed.

(7) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the approving authority and shall cease to have effect if revoked.

[F70 (7A) The Secretary of State may delegate any of his functions under subsections (6) and (7)—

(a) to the Housing Corporation, in the case of a body registered as a social landlord in the register maintained by the Housing Corporation under Part I of the Housing Act 1996, F71 . . .

(b) F71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

to such extent and subject to such conditions as he may specify.]

(8) The Secretary of State as respects Great Britain, or the Head of the Department of the Environment for Northern Ireland as respects Northern Ireland, may make regulations for the purpose of carrying out the provisions of this section; and, from the coming into operation of regulations under this subsection prescribing requirements or conditions for the purposes of subsection (6)(iii) above, “prescribed” in subsection (6)(iii) above shall mean prescribed by or under such regulations.

The power to make regulations under this subsection shall be exercisable by the Secretary of State by statutory instrument and by the Head of the Department of the Environment for Northern Ireland by statutory rule for the purposes of the M12 Statutory Rules (Northern Ireland) Order 1979.

[F72 (9) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.]

Section 42 of the Management Act shall not apply to a claim under this section.

(10) Subject to subsection (11) below, [F73 no claim shall be made under this section unless] during the year or accounting period, or part thereof, to which the claim relates—

(a) no property belonging to the association making the claim was let otherwise than to a member of the association;

(b) no property let by the association, and no part of such property, was occupied, whether solely or as joint occupier, by a person not being a member of the association;

(c) the association making the claim satisfies the conditions specified in subsection (6)(i) and (ii) above and has complied with the conditions prescribed under subsection (6)(iii) for the time being in force; and

(d) any covenants required to be included in grants of tenancies by those conditions have been observed.

For the purposes of paragraph (b) above occupation by any other person in accordance with the will, or the provisions applicable on the intestacy, of a deceased member, shall be treated during the first six months after the death as if it were occupation by a member.

[F74 (11) A housing association may make a claim under this section notwithstanding anything in subsection (10) above, if the association reasonably considers that the requirements of that subsection are substantially complied with.

(11A) If as a result of an enquiry—

(a) [F75 into a company tax return], in which a claim under this section by a housing association is included, or

(b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a housing association, or an amendment of such a claim,

an amendment is made to the association’s [F76 return] or, as the case may be, to the claim, the liability of [F77 the association] to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.]

(12) F78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F63 Words in s. 488(1)(b) substituted (with effect in accordance with Sch. 4 para. 18(2) of the amending Act) by Finance Act 1999 (c. 16), Sch. 4 para. 15(2)(a)

F64 S. 488(1)(c) repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by Finance Act 1999 (c. 16), Sch. 4 para. 15(2)(b), Sch. 20 Pt. 3(7), Note 2

F65 S. 488(2)(b) and preceding word repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by Finance Act 1999 (c. 16), Sch. 4 para. 15(3), Sch. 20 Pt. 3(7), Note 2

F66 S. 488(3) repealed (with effect in accordance with s. 38(2)(3) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 27 Pt. 3(4), Note

F67 Words in s. 488(4) repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by Finance Act 1999 (c, 16), Sch. 4 para. 15(4), Sch. 20 Pt. 3(7), Note 2

F68 Words in s. 488(6) substituted (15.9.1992) by S.I. 1992/1725 (N.I. 15), arts. 1(2), 107, Sch. 8 para. 5

F69 Words in s. 488(6)(iii) substituted (29.7.2004) by The Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2004 (S.I. 2004/2030), arts. 1(1), 5

F70 S. 488(7A) inserted (1.10.1996) by Housing Act 1996 (c. 52), s. 232(3), Sch. 3 para. 8(2); S.I. 1996/2402, art. 3 (with Sch.)

F71 S. 488(7A)(b) and preceding word repealed (1.11.1998) by Government of Wales Act 1998 (c. 38), ss. 140, 158, Sch. 16 para. 56, Sch. 18 Pt. 6; S.I. 1998/2244, art. 5

F72 S. 488(9) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 28(2)

F73 Words in s. 488(10) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 28(3)

F74 S. 488(11)(11A) substituted for s. 488(11) (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 28(4)

F75 Words in s. 488(11A)(a) substituted (with effect in accordance with s. 117(4)(5) of the amending Act) by Finance Act 1998 (c, 36), Sch. 19 para. 48(2)(a); S.I. 1998/3173, art. 2

F76 Words in s. 488(11A) substituted (with effect in accordance with s. 117(4)(5) of the amending Act) by Finance Act 1998 (c. 36), Sch. 19 para. 48(2)(b); S.I. 1998/3173, art. 2

F77 Words in s. 488(11A) substituted (with effect in accordance with Sch. 4 para. 18(2) of the amending Act) by Finance Act 1999 (c. 16), Sch. 4 para. 15(5)

F78 S. 488(12) repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by Finance Act 1999 (c. 16), Sch. 4 para. 15(6), Sch. 20 Pt. 3(7), Note 2

Modifications etc. (not altering text)

C6 S. 488: functions transferred (1.7.1999 with effect in accordance with art. 1(2) of the affecting S.I.) by The National Assembly for Wales (Transfer of Functions) Order 1999 (S.I. 1999/672), art. 2, Sch. 1

C7 See reference to approved housing associations in 1988(F) s.43(3)and 44.

C8 S. 488(7A) modified (1.12.2008) by The Transfer of Housing Corporation Functions (Modifications and Transitional Provisions) Order 2008 (S.I. 2008/2839), arts. 1(1), 3, Sch. para. 1; S.I. 2008/3068, arts. 1(2), 2(1)(b)

Marginal Citations

M8 Source—1970 s.341; 1972 Sch.11 6

M9 1965 c. 12.

M10 1969 c.24 (N.I.).

M11 1985 c. 68.

M12 S.I. 1979/1573 (N.I.12.).

489 Self-build societies. U.K.

(1) M13 Where a self-build society makes a claim in that behalf for any year or part of a year of assessment during which the society was approved for the purposes of this section, rent to which the society was entitled from its members for the year or part shall be disregarded for tax purposes.

(2) Where a claim under subsection (1) above has effect, any adjustment of the society’s liability to tax which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.

(3) Where a self-build society makes a claim in that behalf for an accounting period or part during which it was approved for the purposes of this section, the society shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part thereof on the disposal of any land to a member of the society.

(4) References in this section to the approval of a self-build society are references to its approval by the Secretary of State, and the Secretary of State shall not approve a self-build society for the purposes of this section unless he is satisfied—

(a) that the society is, or is deemed to be, duly registered under the M14 Industrial and Provident Societies Act 1965; and

(b) that the society satisfies such other requirements as may be prescribed by or under regulations under subsection (6) below and will comply with such conditions as may for the time being be so prescribed.

(5) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the Secretary of State and shall cease to have effect if revoked by him.

[F79 (5A) The Secretary of State may delegate any of his functions under subsections (4) and (5) to—

(a) the Housing Corporation, where the society has its registered office in England for the purposes of the Industrial and Provident Societies Act 1965,F80 . . .

(b) F80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

to such extent and subject to such conditions as he may specify.]

(6) The Secretary of State may by statutory instrument make regulations for the purpose of carrying out the provisions of this section; and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of the House of Commons.

[F81 (7) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.]

(8) Subject to subsection (9) below, [F82 no claim shall be made under this section unless] during the year or accounting period, or part thereof, to which the claim relates—

(a) no land owned by the society was occupied, in whole or in part and whether solely or as joint occupier, by a person who was not, at the time of his occupation, a member of the society; and

(b) the society making the claim satisfies the condition specified in paragraph (a) of subsection (4) above and has complied with the conditions prescribed under paragraph (b) of that subsection and for the time being in force;

and for the purposes of paragraph (a) above, occupation by any other person in accordance with the will, or the provisions applicable on the intestacy, of a deceased member, shall be treated during the first six months after the death as if it were occupation by a member.

[F83 (9) A self-build society may make a claim under this section notwithstanding anything in subsection (8) above, if the society reasonably considers that the requirements of that subsection are substantially complied with.

(9A) If as a result of an enquiry—

(a) [F84 into a company tax return], in which a claim under this section by a self-build society is included, or

(b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a self-build society or an amendment of such a claim,

an amendment is made to the society’s [F85 return] or, as the case may be, to the claim, the society’s liability to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.]

(10) A claim under this section shall be in such form and contain such particulars as may be prescribed by the Board.

(11) In this section—

• “self-build society” has the same meaning as in the M15 Housing Associations Act 1985 or, in Northern Ireland, Part VII of the M16 Housing (Northern Ireland) Order 1981; and

• “rent” includes any sums to which a self-build society is entitled in respect of the occupation of any of its land under a licence or otherwise.

(12) In the application of this section to Northern Ireland—

(a) any reference in subsections (4) and (5) above to the Secretary of State shall be construed as a reference to the Department of the Environment for Northern Ireland;

(b) the reference in subsection (4)(a) to the M17 Industrial and Provident Societies Act 1965 shall be construed as a reference to the M18 Industrial and Provident Societies Act (Northern Ireland) 1969; and

(c) for subsection (6) there shall be substituted the following subsection—

“(6) the Department of the Environment for Northern Ireland may by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 make regulations for the purpose of carrying out the provisions of this section; and a statutory rule containing any such regulations shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.”

Textual Amendments

F79 S. 489(5A) inserted (1.10.1996) by Housing Act 1996 (c. 52), s. 232(3), Sch. 3 para. 8(3); S.I. 1996/2402, art. 3 (with Sch.)

F80 S. 489(5A)(b) and preceding word repealed (1.11.1998) by Government of Wales Act 1998 (c. 38), ss. 140, 158, Sch. 16 para. 57, Sch. 18 Pt. 6; S.I. 1998/2244, art. 5

F81 S. 489(7) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 29(2)

F82 Words in s. 489(8) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 29(3)

F83 S. 489(9)(9A) substituted for s. 489(9) (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 29(4)

F84 Words in s. 489(9A)(a) substituted (with effect in accordance with s. 117(4)(5) of the amending Act) by Finance Act 1998 (c. 36), Sch. 19 para. 49(a); S.I. 1998/3173, art. 2

F85 Word in s. 489(9A) substituted (with effect in accordance with s. 117(4)(5) of the amending Act) by Finance Act 1998 (c. 36), Sch. 19 para. 49(b); S.I. 1998/3173, art. 2

Modifications etc. (not altering text)

C9 S. 489: functions transferred (1.7.1999 with effect in accordance with art. 1(2) of the affecting S.I.) by The National Assembly for Wales (Transfer of Functions) Order 1999 (S.I. 1999/672), art. 2, Sch. 1

C10 See 1976(D)—exemption of certain housing associations from development land tax. 1976(D)repealed from 19March 1985.

C11 See reference to approved self-build societies in 1988(F) s.43(3)and s.44.

C12 S. 489(5A) modified (1.12.2008) by The Transfer of Housing Corporation Functions (Modifications and Transitional Provisions) Order 2008 (S.I. 2008/2839), arts. 1(1), 3, Sch. para. 1; S.I. 2008/3068, arts. 1(2), 2(1)(b)

Marginal Citations

M13 Source—1970 s.341A

M14 1965 c. 12.

M15 1985 c. 68.

M16 S.I. 1981/156 (N.I. 3).

M17 1965 c. 12.

M18 1969 c. 24 (N.I.).

490 Companies carrying on a mutual business or not carrying on a business. U.K.

(1) M19 Subject to subsection (2) below, where a company carries on any business of mutual trading or mutual insurance or other mutual business the provisions of the Tax Acts relating to distributions shall apply to distributions made by the company notwithstanding that they are made to persons participating in the mutual activities of that business and derive from those activities, but shall so apply only to the extent to which the distributions are made out of profits of the company which are brought into charge to corporation tax or out of franked investment income F86 . . . F87 . . . .

(2) In the case of a company carrying on any mutual life assurance business, the provisions of the Tax Acts relating to distributions shall not apply to distributions made to persons participating in the mutual activities of that business and derived from those activities F88 . . . .

(3) Subject to subsections (1) and (2) above, the fact that a distribution made by a company carrying on any such business is derived from the mutual activities of that business and the recipient is a person participating in those activities shall not affect the character which the payment or other receipt has for purposes of corporation tax or income tax in the hands of the recipient.

(4) Where a company does not carry on, and never has carried on, a trade or a business of holding investments, and is not established for purposes which include the carrying on of a trade or of such a business, the provisions of the Tax Acts relating to distributions shall apply to distributions made by the company only to the extent to which the distributions are made out of profits of the company which are brought into charge to corporation tax or out of franked investment income F89 . . . .

(5) F90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F86 Words in s. 490(1) repealed (with effect in accordance with Sch. 3 para. 28(3) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 28(2), Sch. 27 Pt. 3(2), Note

F87 Words in s. 490(1) repealed (with effect in accordance with Sch. 6 para. 9(5) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 9(2), Sch. 8 Pt. 2(11), Note

F88 Words in s. 490(2) repealed (with effect in accordance with Sch. 18 Pt. 6(6) Note of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(6)

F89 Words in s. 490(4) repealed (with effect in accordance with Sch. 6 para. 9(5) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 9(3), Sch. 8 Pt. 2(11), Note

F90 S. 490(5) repealed (with effect in accordance with Sch. 6 para. 9(5) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 9(4), Sch. 8 Pt. 2(11), Note

Modifications etc. (not altering text)

C13 S. 490 amended (27.7.1993) by 1993 c. 34, s. 78(6)(11)

Marginal Citations

M19 Source—1970 s.346

491 Distribution of assets of body corporate carrying on mutual business. U.K.

(1) M20 Where [F91 any company] receives any money or money’s worth—

(a) forming part of the assets of a body corporate, other than assets representing capital; or

(b) forming part of the consideration for the transfer of the assets of a body corporate, other than assets representing capital, as part of a scheme of amalgamation or reconstruction which involves the winding up of the body corporate; or

(c) consisting of the consideration for a transfer or surrender of a right to receive anything falling under paragraph (a) or (b) above, being a receipt not giving rise to any charge to tax on the recipient apart from this section,

and the body corporate has at any time carried on a trade which consists of or includes the conducting of any mutual business (whether confined to members of the body corporate or not), and is being or has been wound up or dissolved, the provisions of this section shall apply to the receipt.

(2) If a transfer or surrender of a right under subsection (1)(c) above is not at arm’s length, [F92 the company] making the transfer or surrender shall, for the purposes of this section, be deemed then to have received consideration equal to the value of the right.

(3) If in respect of a payment of any amount made to the body corporate for the purposes of its mutual business any deduction has been allowed for [F93 the purposes of corporation tax] in computing the [F94 profits] or losses of a trade, then—

(a) if at the time of the receipt [F95 the recipient company] is the person, or one of the persons, carrying on that trade, the amount or value of the receipt shall be treated for [F93 the purposes of corporation tax] as a trading receipt of that trade; and

(b) if at the time of the receipt [F95 the recipient company] is not the person, or one of the persons, carrying on that trade, but was the person, or one of the persons, carrying on that trade when any payment was made to the body corporate for the purposes of its mutual business in respect of which a deduction was allowed for [F93 the purposes of corporation tax] in computing the [F94 profits] or losses of the trade, [F95 the recipient company] shall, subject to subsection (6) below, be charged [F96 to corporation tax] under Case VI of Schedule D for the [F97 accounting period] in which the receipt falls on an amount equal to the amount or value of the receipt.

(4) Subsection (3)(a) above applies notwithstanding that, as a result of a change in the persons carrying on the trade, the [F94 profits] are under section F98 . . . 337(1) determined as if it had been permanently discontinued and a new trade set up and commenced.

(5) F99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) If the trade mentioned in subsection (3)(b) above was permanently discontinued before the time of the receipt, then in computing the charge to tax under subsection (3)(b) above there shall be deducted from the amount or value of the receipt—

(a) any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade had not been discontinued, would have been deducted in computing for tax purposes the [F94 profits] or losses of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those profits as so computed, and

(b) any capital allowance to which the person who carried on the trade was entitled immediately before the discontinuance and to which effect has not been given by way of relief before discontinuance.

(7) Relief shall not be given under subsection (6) above or under section 105(1) in respect of any loss, expense, debit or allowance if and so far as it has been so given by reference to another charge to tax under this section or under section 103.

(8) For the purposes of subsection (1) above assets representing capital consist of—

(a) assets representing any loan or other capital subscribed, including income derived from any investment of any part of that capital, but not including profits from the employment of that capital for the purposes of the mutual business of the body corporate;

(b) assets representing any [F94 profits] charged to tax as being [F94 profits] of any part of the trade carried on by the body corporate which does not consist of the conducting of any mutual business;

(c) (so far as not comprised in paragraphs (a) and (b) above) assets representing taxed income from any investments.

(9) In this section “mutual business” includes any business of mutual insurance or mutual trading.

(10) Subsections (3) to (7) above shall apply with any necessary modifications—

(a) to a profession F100 . . . ; and

(b) to the occupation of woodlands the profits or gains of which are assessable under Schedule D;

as they apply to a trade.

(11) It is hereby declared that the description of trades in subsection (1) above does not include any trade all the [F94 profits] of which are chargeable to tax and, in particular, does not include such a trade carried on by any registered industrial and provident society.

Textual Amendments

F91 Words in s. 491(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(2) (with Sch. 2)

F92 Words in s. 491(2) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(3) (with Sch. 2)

F93 Words in s. 491(3) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(4)(a) (with Sch. 2)

F94 Words in s. 491(3)(4)(5)(6)(8)(b)(11) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a), Sch. 7 para. 1

F95 Words in s. 491(3) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(4)(b) (with Sch. 2)

F96 Words in s. 491(3)(b) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(4)(c) (with Sch. 2)

F97 Words in s. 491(3)(b) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(4)(d) (with Sch. 2)

F98 Words in s. 491(4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(5), Sch. 3 (with Sch. 2)

F99 S. 491(5) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(6), Sch. 3 (with Sch. 2)

F100 Words in s. 491(10)(a) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 189(7), Sch. 3 (with Sch. 2)

Modifications etc. (not altering text)

C14 See 1988(F) Sch.14 Part V—repeal of (b)from 6April 1993.

Marginal Citations

M20 Source—1970 s.347