Income Tax (Trading and Other Income) Act 2005

379 Industrial and provident society payments

(1) Any dividend, bonus or other sum payable to a shareholder in—

(a) a registered industrial and provident society, or

(b) a UK agricultural or fishing co-operative,

is treated as interest for income tax purposes if it is payable by reference to the amount of the shareholder’s holding in its share capital.

(2) In subsection (1)—

• “registered industrial and provident society” means a society registered or treated as registered under the Industrial and Provident Societies Act 1965 (c. 12) or the Industrial and Provident Societies Act (Northern Ireland) 1969 (c. 24 (N.I.)), and

• “UK agricultural or fishing co-operative” means a co-operative association—

  (a)

  which is established in the United Kingdom and UK resident, and

  (b)

  whose primary object is assisting its members in—

  (i)

  carrying on agricultural or horticultural businesses on land occupied by them in the United Kingdom, or

  (ii)

  carrying on businesses consisting in the catching or taking of fish or shellfish.

(3) In subsection (2) “co-operative association” means a body with a written constitution from which the Secretary of State considers that it is in substance a co-operative association.

(4) For the purposes of subsection (3), the Secretary of State must have regard to the way in which the body’s constitution provides for its income to be applied for its members' benefit and all other relevant provisions.

(5) In Northern Ireland subsections (3) and (4) apply with the substitution for “the Secretary of State” of “the Department of Agriculture and Rural Development”.