LAM17170 | Relevant other business - transfers between friendly societies: FA12/S167

For transfers or amalgamations taking place from 21 July 2008, if there is a transfer of “relevant other business”

• from a friendly society that was exempt from corporation tax on profits from the transferred business under FA12/S164 or FA12/S165

• to another friendly society

the transferee is exempt from corporation tax on its profits arising from the relevant other business so far as relating to contracts made before that time, subject to the points below (FA12/S167(1)).

If the transferee increases the scale of benefits it undertakes to provide under the transferred contracts, the transferee will not be exempt (FA12/S167(2)). Note that this does not preclude the business still being exempt if it qualifies under other sections.

Conversely, if, after 21 July 2008, there is a transfer of “relevant other business”

• from a friendly society that was not exempt from corporation tax on profits from the transferred business under FA12/S164 or FA12/S165

• to another friendly society

the transferee is not exempt from corporation tax on its profits arising from the relevant other business so far as relating to contracts made before that time (FA12/S167(3)).

For the definition of “relevant other business” see LAM17160.

The Treasury may make regulations that modify the exemptions or restrictions covered in FA12/S167 and these regulations could have retrospective effect (FA12/S167(5)). SI2012/3008 Friendly Societies (Modification of the Tax Acts) Regulations 2012 was partly made under FA12/S167(4) to (6).