CTM40520 | Particular bodies: registered societies: share and loan interest paid: the society
From HM Revenue & Customs · Company Taxation Manual
Both share interest and loan interest paid by a registered society are treated as interest paid under a loan relationship.
This should be obvious for a payment made in respect of any mortgage, loan, loan stock or deposit.
Any dividend, bonus or other sum payable to a shareholder in a registered society is treated for Corporation Tax purposes as a loan relationship within if it is paid by reference to the shareholder’s share capital holding ().
Where the latter rule applies, to the extent that the shareholder’s holding is held for the purposes of a trade, the shareholder is treated for loan relationship purposes accordingly (, which was a minor Tax Law Rewrite clarification).
Both share and loan interest are paid gross to the recipient, . The society must however make a return of some of the payments, see .