CTM40513 | Particular bodies: registered societies: payments not distributions
From HM Revenue & Customs · Company Taxation Manual
and S1056
The following are, by statute, not treated as distributions for CT purposes.
Interest and share dividends:
This applies to
• interest paid by a registered society in respect of any mortgage, loan, loan stock or deposit, and
• any sum paid by way of dividend, bonus, interest or otherwise
that is paid to a shareholder in a registered society, and
is paid by reference to the shareholder’s holding in the society’s capital.
Both types of payment are treated as interest paid under a loan relationship, see and are paid gross.
Dividend and bonus relating to transactions:
This applies to
• a dividend or bonus granted by a registered society, and
• , see , allows the dividend or bonus to be deducted in computing trading income of the society.
See regarding agricultural and fishing co-operatives.
For details of the treatment of all of these types of payment in the hands of the recipient, see and for details of the returns required to be made by the society in respect of interest and share dividends, see .