CTM40340 | Particular bodies: friendly societies: repayment claims

Form R69 is used for repayment claims by a society that carries on

• only 'other business' exempted under FA12/S164 or S165, see CTM40335, or

• only tax exempt ‘basic life assurance and general annuity business’ (BLAGAB, see CTM40325), or

• a combination of business, all of which are exempt.

Societies carrying on only tax exempt BLAGAB

Any society that carries on any taxable business should be dealt with by LB (Financial Advisory Services), see CTM40315. Form R69 is not appropriate for these societies.

The R69 no longer asks societies to submit vouchers with their claims routinely, in line with the ‘process now, check later’ principles of CTSA. The claims are covered by the legislation at TMA70/SCH1A (claims etc. not included in returns). SCH1A includes provisions for making enquiries into claims, see CTM90600 onwards. Where appropriate, vouchers may be requested as part of an enquiry - see the Enquiry Manual for guidance.

The cases where a friendly society receives income under deduction of Income Tax are likely to be limited as they qualify as companies, in relation to which the tax deduction rules do not generally apply. But where a society receives a dividend distribution from an authorised investment fund (authorised unit trust or OEIC) Income Tax may be treated as deducted from part or all of the distribution. See CTM48515 for further guidance.

If a society only carries on business which is covered by the exemption at FA12/S164 or S165, see CTM40335, then it can claim repayment of all Income Tax suffered by deduction on form R69. Tax credits on dividends are not payable to the society where the distribution was made on or after 6 April 1999 and such tax credits should not be entered in section 1 of the R69.

Societies carrying on both tax exempt basic life assurance and general annuity business and tax exempt ‘other’ business

Such a society may also claim repayment of all Income Tax suffered by deduction on form R69. However, the position for tax credits is more complicated as only tax credits on distributions covered by the exemption at FA12/S153 for profits arising from life or endowment business were payable to the society where they were made after 5 April 1999.

The statute did not specify a method of apportioning the distributions between tax exempt life or endowment or other business in these circumstances. For distributions made on or after 6 April 2004 no tax credits are payable to friendly societies at all, so this point is now of historical interest. However BAI (Technical) will give advice in any remaining cases of doubt or difficulty.