Finance Act 1988

Section 145.

SCHEDULE 12 U.K. Building Societies: Change of Status

Introductory U.K.

1 Paragraphs 2 to 7 below apply where there is a transfer of the whole of a building society’s business to a company (“the successor company”) in accordance with section 97 and the other applicable provisions of the M1 Building Societies Act 1986.

Marginal Citations

M1 1986 c. 53.

Gilt-edged securities and other financial trading stock U.K.

2 (1) For the purposes of section 100(1) of the Taxes Act 1988 (valuation of trading stock on discontinuance of trade) the society’s financial trading stock shall be valued at an amount equal to its cost to the society.

(2) In computing for any corporation tax purpose the profits or gains of a trade carried on by the successor company, such of the assets comprised in the transfer as constituted the society’s financial trading stock shall be regarded as acquired by the company at their cost to the society.

(3) In this paragraph “financial trading stock”, in relation to a building society, means such of the assets held by the society by virtue of regulations under section 21(7) of the Building Societies Act 1986 (liquid assets etc.) as constitute trading stock for the purposes of section 100 of the Taxes Act 1988.

Capital allowances U.K.

3 (1) For the purposes of the allowances and charges provided for by the [F1 Capital Allowances Act 1990] (capital allowances) the trade of the society shall not be treated as permanently discontinued and the trade of the successor company shall not be treated as a new trade set up and commenced by the successor company.

(2) There shall be made to or on the successor company in accordance with those Acts all such allowances and charges as would, if the society had continued to carry on the trade, have fallen to be made to or on it, and the amount of any such allowance or charge shall be computed as if the successor company had been carrying on the trade since the society began to do so and as if everything done to or by the society had been done to or by the successor company.

(3) No transfer of assets from the society to the successor company effected by section 97 of the Building Societies Act 1986 shall be treated as giving rise to any such allowance or charge.

Textual Amendments

F1 Words in Sch. 12 para. 3(1) substituted by Capital Allowances Act 1990 (c. 1, SIF 63:1), s. 164(3), Sch. 1 para. 9(4).

Capital gains: assets acquired from society, etc. U.K.

F2 4 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2 Sch. 12 para. 4 repealed (6.3.1992 with effect as mentioned in s. 289 of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with ss. 101(1), 201(3), 290, Sch. 11 paras. 22, 26(2), 27)

Capital gains: shares, and rights to shares, in successor company U.K.

F3 5 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F3 Sch. 12 para. 5 repealed (6.3.1992 with effect as mentioned in s. 289 of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with ss. 101(1), 201(3), 290, Sch. 11 paras. 22, 26(2), 27)

Distributions U.K.

6 (1) Where, in connection with the transfer, qualifying benefits are conferred by the society or the successor company on members of the society, the conferring of those benefits shall not be regarded as either— U.K.

(a) the making of a distribution, within the meaning of the Corporation Tax Acts; or

(b) the payment or crediting of a dividend for the purposes of [F4 section 477A] of the Taxes Act 1988 or any regulations under that section (building society interest etc.).

(2) Sub-paragraph (1) above does not preclude any qualifying benefit (and, in particular, any qualifying benefit which in the hands of the recipient would, apart from that sub-paragraph, constitute income for the purposes of income tax) from being a capital distribution for the purposes of section [F5 122 of the Taxation of Chargeable Gains Act 1992], and in that section “distribution” shall be construed accordingly.

(3) In this paragraph “qualifying benefits” means—

(a) any such rights as are mentioned in paragraph 5(1)(a), (b) or (c) above, and any property obtained by the exercise of those rights;

(b) any shares issued or disposed of as mentioned in paragraph 5(2) above;

(c) any shares issued or disposed of, or to which a member becomes entitled, as mentioned in paragraph 5(3) or (4) above, and any interest in the settled property constituted by those shares;

(d) any payment in lieu of a qualifying benefit falling within paragraphs (a) to (c) above;

(e) any distribution made in pursuance of section 100(2)(b) of the M2 Building Societies Act 1986.

(4) “Member” has the same meaning in this paragraph as in paragraph 5 above.

Textual Amendments

F4 Words in Sch. 12 para. 6(1)(b) substituted (25.07.1991)(where qualifying benefits are conferred on or after 06.04.1991) by Finance Act 1991 (c. 31, SIF 63:1), s. 79(1)(2)

F5 Words in Sch. 12 para. 6(2) substituted (6.3.1992 with effect as mentioned in s. 289 of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 16(7) (with ss. 60, 101(1), 171, 201(3))

Marginal Citations

M2 1986 c. 53.

Contractual savings schemes U.K.

7 U.K. The following provisions, namely—

(a) section 326 of the Taxes Act 1988 (certain sums to be disregarded for income tax purposes), and

F6 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

shall have effect in relation to any terminal bonus, or interest or other sum, payable after the transfer under a savings scheme which immediately before the transfer was a certified contractual savings scheme (within the meaning of section 326) in relation to the society notwithstanding that it ceased to be such a scheme by reason of the transfer.

Textual Amendments

F6 Sch. 12 para. 7(b) repealed (6.3.1992 with effect as mentioned in s. 289 of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with ss. 101(1), 201(3), 290, Sch. 11 paras. 22, 26(2), 27)

Stamp duty U.K.

8 U.K. Section 109 of the M3 Building Societies Act 1986 (exemption from stamp duty) shall be renumbered as subsection (1) of that section and after that provision as so renumbered there shall be inserted—

“(2) No transfer effected by subsection (6) or (7) of section 97 shall give rise to any liability to stamp duty.”

Marginal Citations

M3 1986 c. 53.