Financial Services Act 1986

Temporary exemptions for friendly societies

14 (1) A registered friendly society which transacts no investment business after the date on which section 3 of this Act comes into force except for the purpose of making or carrying out relevant existing members' contracts shall be treated for the purposes of that section as if it were an exempted person under Chapter IV of Part I of this Act.

(2) Subject to sub-paragraph (3) below, for the purposes of this paragraph " relevant existing members' contracts ", in relation to any society, means—

(a) contracts made by the society before that date ; and

(b) in the case of a small income society—

(i) during the period of three years beginning with that date, tax exempt investment agreements made by it with persons who were members of the society before that date ; and

(ii) after the expiry of that period, tax exempt investment agreements made by it with such persons before the expiry of that period.

(3) Paragraph (b) of sub-paragraph (2) above shall not apply to a registered friendly society after the expiry of the period of two years beginning with that date unless before the expiry of that period it has by special resolution (within the meaning of the [1974 c. 46.] Friendly Societies Act 1974 or, as the case may be, the [1970 c. 31 (N.I.).] Friendly Societies Act (Northern Ireland) 1970) determined—

(a) to transact no further investment business except for the purpose of carrying out contracts entered into before the expiry of the said period of three years ; or

(b) to take such action as is necessary to procure the transfer of its engagements to another such society or a company or the amalgamation of the society with another such society under section 82 of the said Act of 1974 or, as the case may be, section 70 of the said Act of 1970,

and a copy of that resolution has been registered in accordance with section 86 of the said Act of 1974 or, as the case may be, section 75 of the said Act of 1970.

(4) For the purpose of sub-paragraph (2) above a society is a small income society if its income in 1985 from members' contributions did not exceed £50,000.

(5) For the purposes of sub-paragraph (2) above an investment agreement is a tax exempt investment agreement if the society by which it is made may obtain exemption from income and corporation tax on the profits from it under section 332 of the [1970 c. 10.] Income and Corporation Taxes Act 1970.

(6) A society to which sub-paragraph (1) or (2) above applies shall not be an authorised person for the purposes of this Act nor a regulated friendly society for the purposes of the provisions of Schedule 11 to this Act.