Income and Corporation Taxes Act 1988

CHAPTER IVU.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

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

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

Textual Amendments

[F4477A Building societies: [F3loan 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(aa)F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(b)no part of any such dividends or interest F11. . . shall be treated as a distribution of the society or as franked investment income of any company resident in the United Kingdom.

[F12(3A)F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3B)F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3C)F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(4)F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)F15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F17(9)In this section “dividend” includes any distribution (whether or not described as a dividend).]

[F18(10)F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]]

Textual Amendments

F3Words 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)

F4S. 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)

F5S. 477A(1)-(2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 88(2), Sch. 3 Pt. 1 (with Sch. 2)

F8Words 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)

F9S. 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)

F10S. 477A(3)(a)(aa)(4)(10) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 161, Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F11Words 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)

F13S. 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)

F14S. 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)

F15S. 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)

F16S. 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

F17S. 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)

Modifications etc. (not altering text)

C1S. 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.”

[F19477B Building societies: incidental costs of issuing qualifying shares.U.K.

F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F20S. 477B repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 162, Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

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

F21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F21S. 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.

F22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

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

F23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F24480A Relevant deposits: deduction of tax from interest payments.U.K.

F25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F24Ss. 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)

F25Ss. 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)

[F26480B Relevant deposits: exception from section 480A.U.K.

F27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F26Ss. 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)

F27Ss. 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)

[F28480C Relevant deposits: computation of tax on interest.U.K.

F29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F28Ss. 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)

F29S. 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.

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

Textual Amendments

F30Ss. 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.

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F31Ss. 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)

[F32482A Audit powers in relation to non-residents.U.K.

F33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F33S. 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.

F34(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F34(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F34(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.

F34(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

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

F35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F35S. 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.

F36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F36S. 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)M1Notwithstanding 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 [F37for the purposes of corporation tax]F38. . . .

(2)F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)F40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(6)F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)F40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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)F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 [F43Secretary 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;

  • F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • “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

F37Words 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)

F38Words in s. 486(1) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 163(2), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F39S. 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)

F40S. 486(4)(7) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 163(3), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F41S. 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)

F42S. 486(10)(11) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 163(4), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F44S. 486(12): definition of "registered industrial and provident society" repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 163(5), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Modifications etc. (not altering text)

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

C4S. 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)

C5S. 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

M1Source—1970 s.340, 345; CUA 1979 s.25(2)

487 Credit unions.U.K.

F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F45S. 487 repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 164, Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

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)M2rent 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 [F46in relation to the association as if there were no interest so payable].

(c)F47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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;F48. . .

(b)F48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)F49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Where a claim under subsection (1) above has effect, any adjustment of the liability to tax of F50. . . 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 M3Industrial and Provident Societies Act 1965 or the M4Industrial and Provident Societies Act (Northern Ireland) 1969, and is a housing association within the meaning of the M5Housing Associations Act 1985 or [F51Article 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 [F52the 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.

[F53(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, F54. . .

(b)F54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 M6Statutory Rules (Northern Ireland) Order 1979.

[F55(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, [F56no 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.

[F57(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)[F58into 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 [F59return] or, as the case may be, to the claim, the liability of [F60the association] to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.]

(12)F61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F46Words 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)

F47S. 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

F48S. 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

F49S. 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

F50Words 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

F51Words in s. 488(6) substituted (15.9.1992) by S.I. 1992/1725 (N.I. 15), arts. 1(2), 107, Sch. 8 para. 5

F55S. 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)

F56Words 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)

F57S. 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)

F58Words 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

F59Words 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

F60Words 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)

F61S. 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)

C6S. 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.

Marginal Citations

M2Source—1970 s.341; 1972 Sch.11 6

M6S.I. 1979/1573 (N.I.12.).

489 Self-build societies.U.K.

(1)M7Where 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 M8Industrial 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.

[F62(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,F63. . .

(b)F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

[F64(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, [F65no 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.

[F66(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)[F67into 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 [F68return] 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 M9Housing Associations Act 1985 or, in Northern Ireland, Part VII of the M10Housing (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 M11Industrial and Provident Societies Act 1965 shall be construed as a reference to the M12Industrial 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

F64S. 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)

F65Words 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)

F66S. 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)

F67Words 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

F68Word 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)

C9S. 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

C10See 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.

Marginal Citations

M7Source—1970 s.341A

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

(1)M13Subject 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 F69. . . F70. . . .

(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 F71. . . .

(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 F72. . . .

(5)F73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F69Words 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

F70Words 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

F71Words 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)

F72Words 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

F73S. 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)

C13S. 490 amended (27.7.1993) by 1993 c. 34, s. 78(6)(11)

Marginal Citations

M13Source—1970 s.346

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

F74. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74S. 491 repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 165, Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)