|
| |
|
(c) | it is registered on or after that date but before 27 March 1974 and its |
| |
rules limit the total amount which may be paid by a member by way of |
| |
contributions and deposits to not more than £1 per month or such |
| |
greater amount as HMRC Commissioners may authorise for the |
| |
purposes of this section. |
| 5 |
(3) | For the purposes of this section a registered friendly society formed on the |
| |
amalgamation of two or more friendly societies is treated as registered before |
| |
1 June 1973 if, at the time of amalgamation, each of the societies amalgamated |
| |
was a qualifying society (but otherwise is treated as registered at that time). |
| |
(4) | The exemption applies only if the society makes a claim. |
| 10 |
165 | Incorporated friendly societies |
| |
(1) | An incorporated friendly society which is a qualifying society is not liable to |
| |
pay corporation tax (whether on income or chargeable gains) on its profits |
| |
other than those arising from— |
| |
(a) | life assurance business, or |
| 15 |
(b) | PHI business comprised in BLAGAB or eligible PHI business. |
| |
(2) | An incorporated friendly society is a qualifying society if it falls within any of |
| |
cases A to C (but see section 168 for circumstances in which it ceases to be a |
| |
| |
(3) | Case A is that, immediately before its incorporation, it was a registered friendly |
| 20 |
society which was a qualifying society within the meaning of section 164. |
| |
| |
(a) | it was formed otherwise than by the incorporation of a registered |
| |
friendly society or the amalgamation of two or more friendly societies, |
| |
| 25 |
(b) | its business is limited to the provision, in accordance with its rules, of |
| |
benefits for or in respect of employees of a particular employer or such |
| |
other group of persons as is for the time being approved for the |
| |
purposes of this section by HMRC Commissioners. |
| |
| 30 |
(a) | it was formed by the amalgamation of two or more friendly societies, |
| |
| |
(b) | at the time of the amalgamation each of the societies being |
| |
amalgamated was a qualifying society within the meaning of section |
| |
| 35 |
(6) | The exemption applies only if the society makes a claim. |
| |
(7) | The exemption does not apply to any profits arising or accruing to the society |
| |
from, or by reason of its interest in, a body corporate— |
| |
(a) | which is a subsidiary of the society (within the meaning of FSA 1992), or |
| |
(b) | of which the society has joint control (within the meaning of FSA 1992). |
| 40 |
166 | Transfers from friendly societies to insurance companies etc |
| |
(1) | For the purposes of this Part “relevant other business” means any business |
| |
| |
(a) | life assurance business, or |
| |
|
| |
|
| |
|
(b) | PHI business comprised in BLAGAB or eligible PHI business. |
| |
| |
(a) | at any time an insurance company acquires by way of transfer of |
| |
engagements from a friendly society any relevant other business, and |
| |
(b) | immediately before that time the society was exempt from corporation |
| 5 |
tax on profits arising from that business as a result of section 164 or 165, |
| |
| the insurance company is exempt from corporation tax on its profits arising |
| |
from the relevant other business so far as relating to contracts made before that |
| |
| |
(3) | If a friendly society— |
| 10 |
(a) | at any time ceases as a result of section 91 of FSA 1992 (conversion into |
| |
company) to be registered under that Act, and |
| |
(b) | immediately before that time the society was, as a result of section 164 |
| |
or 165, exempt from corporation tax on profits arising from any |
| |
relevant other business carried on by it, |
| 15 |
| the company into which the society is converted is exempt from corporation |
| |
tax on its profits arising from the relevant other business so far as relating to |
| |
contracts made before that time. |
| |
(4) | If during an accounting period of a company there is an increase in the scale of |
| |
benefits which it undertakes to provide in the course of carrying on relevant |
| 20 |
other business relating to contracts made before the time of transfer or |
| |
conversion, the company is not exempt from corporation tax as a result of this |
| |
section for that or any subsequent accounting period. |
| |
(5) | For the purposes of the Corporation Tax Acts any part of a company’s business |
| |
which is exempt from corporation tax as a result of this section is to be treated |
| 25 |
as a separate business from any other business carried on by the company. |
| |
(6) | The Treasury may by regulations provide that, where any part of the business |
| |
of a company is exempt from corporation tax as a result of this section, the |
| |
Corporation Tax Acts have effect subject to such exceptions or other |
| |
modifications as they consider appropriate. |
| 30 |
(7) | The regulations may make provision having retrospective effect. |
| |
| |
(a) | make different provision for different cases or circumstances, and |
| |
(b) | contain incidental, supplementary, consequential, transitional, |
| |
transitory or saving provision. |
| 35 |
167 | Transfers between friendly societies |
| |
| |
(a) | at any time a friendly society acquires by way of transfer of |
| |
engagements or amalgamation from another friendly society any |
| |
relevant other business, and |
| 40 |
(b) | immediately before that time the transferor was exempt from |
| |
corporation tax on profits arising from that business as a result of |
| |
| |
| 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. |
| 45 |
|
| |
|
| |
|
(2) | If during an accounting period of the transferee there is an increase in the scale |
| |
of benefits which it undertakes to provide in the course of carrying on relevant |
| |
other business relating to contracts made before that time, the transferee is not |
| |
exempt from corporation tax as a result of this section for that or any |
| |
subsequent accounting period. |
| 5 |
| |
(a) | at any time a friendly society acquires by way of transfer of |
| |
engagements or amalgamation from another friendly society any |
| |
relevant other business, and |
| |
(b) | immediately before that time the transferor was not exempt from |
| 10 |
corporation tax on profits arising from that business as a result of |
| |
| |
| 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. |
| |
(4) | The Treasury may by regulations provide that, where any part of the business |
| 15 |
of a friendly society is, or is not, exempt from corporation tax as a result of this |
| |
section, the Corporation Tax Acts have effect subject to such exceptions or |
| |
other modifications as they consider appropriate. |
| |
(5) | The regulations may make provision having retrospective effect. |
| |
| 20 |
(a) | make different provision for different cases or circumstances, and |
| |
(b) | contain incidental, supplementary, consequential, transitional, |
| |
transitory or saving provision. |
| |
(7) | Nothing in this section applies in relation to transfers or amalgamations taking |
| |
place before 21 July 2008. |
| 25 |
168 | Withdrawal of qualifying status |
| |
(1) | HMRC Commissioners may give a direction under this section to— |
| |
(a) | a registered friendly society which is a qualifying society for the |
| |
purposes of section 164 as a result of its registration before 1 June 1973, |
| |
| 30 |
(b) | an incorporated friendly society which is a qualifying society for the |
| |
purposes of section 165 as a result of falling within case A or C and |
| |
whose business and rules are not of a kind mentioned in section |
| |
| |
(2) | The Commissioners may give the direction if— |
| 35 |
(a) | the society begins to carry on relevant other business or, in their |
| |
opinion, begins to carry on relevant other business on an enlarged scale |
| |
or of a new character, and |
| |
(b) | it appears to them, having regard to the restrictions imposed by section |
| |
164 on registered friendly societies registered on or after 1 June 1973, |
| 40 |
that for the protection of the revenue it is expedient to give the |
| |
| |
(3) | The direction is that (and has the effect that) the society ceases to be a |
| |
qualifying society as from the date of the direction. |
| |
(4) | The society may appeal against the direction on the ground that— |
| 45 |
|
| |
|
| |
|
(a) | it has not begun to carry on business as mentioned in subsection (2)(a), |
| |
| |
(b) | the direction is not necessary for the protection of the revenue. |
| |
(5) | The appeal must be made within 30 days of the date on which the direction is |
| |
| 5 |
169 | Payments by non-qualifying societies treated as qualifying distributions |
| |
(1) | This section applies if— |
| |
(a) | a friendly society which is not a qualifying society makes a payment to |
| |
a member in respect of the member’s interest in the society, |
| |
(b) | the payment is made in the course of relevant other business, and |
| 10 |
(c) | the payment exceeds the total amount of any sums paid by the member |
| |
to the society by way of contributions or deposits after deducting from |
| |
that total any relevant previous payment and any relevant earlier |
| |
| |
(2) | The excess is treated for the purposes of corporation tax and income tax as a |
| 15 |
| |
| |
(a) | the reference to a relevant previous payment is to the amount of any |
| |
previous payment made by the society to the member in respect of the |
| |
member’s interest in the society, and |
| 20 |
(b) | the reference to a relevant earlier repayment is to the amount of any |
| |
earlier repayment of sums paid by the member to the society by way of |
| |
contributions or deposits. |
| |
(4) | In the case of an incorporated friendly society which, immediately before its |
| |
incorporation, was a registered friendly society which was not a qualifying |
| 25 |
| |
(a) | references in this section to payments (or repayments) to or from the |
| |
society include payments (or repayments) to or from the registered |
| |
| |
(b) | subsection (3)(a) does not apply to a payment made before 27 March |
| 30 |
1974 or, if the registered friendly society was previously a qualifying |
| |
society but ceased to be one as a result of a direction given to it under |
| |
section 168(1)(a), a payment made on or before such later date as was |
| |
specified in the direction. |
| |
(5) | In the case of any other incorporated friendly society which was previously a |
| 35 |
qualifying society but ceased to be one as a result of a direction given to it |
| |
under section 168(1)(b), subsection (3)(a) does not apply to a payment made on |
| |
or before the date specified in the direction. |
| |
(6) | In the case of a registered friendly society, subsection (3)(a) does not apply to— |
| |
(a) | a payment made before 27 March 1974, or |
| 40 |
(b) | if the society was previously a qualifying society but ceased to be one |
| |
as a result of a direction given to it under section 168(1)(a), a payment |
| |
made on or before such later date as was specified in the direction. |
| |
(7) | For the purposes of this section— |
| |
|
| |
|
| |
|
(a) | a registered friendly society is not a qualifying society at any time if, at |
| |
that time, it is not a qualifying society within the meaning of section |
| |
| |
(b) | an incorporated friendly society is not a qualifying society at any time |
| |
if, at that time, it is not a qualifying society within the meaning of |
| 5 |
| |
| |
170 | Transfer schemes under s.6(5) of FSA 1992 |
| |
(1) | This section applies if assets of a branch of a registered friendly society have |
| |
been identified in a scheme under section 6(5) of FSA 1992 (property, rights etc |
| 10 |
excluded from transfer to the society on its incorporation). |
| |
(2) | In relation to any time after the incorporation of the society, the assets are to be |
| |
treated for the purposes of the Tax Acts as assets of the society (and, |
| |
accordingly, any corporation tax or income tax liability arising in respect of |
| |
them is a liability of the society rather than of the branch). |
| 15 |
(3) | If, as a result of this section, corporation tax or income tax in respect of any of |
| |
the assets becomes chargeable on and is paid by the society, the society may |
| |
recover from the trustees in whom those assets are vested the amount of the tax |
| |
| |
171 | Exemption for unregistered friendly societies |
| 20 |
(1) | A friendly society which is neither a registered friendly society nor an |
| |
incorporated friendly society is not liable to pay corporation tax (whether on |
| |
income or chargeable gains) on its profits if its income does not exceed £160 a |
| |
| |
(2) | The exemption applies only if the society makes a claim. |
| 25 |
| |
| |
| |
“friendly society”, without qualification, means (except in section 171) a |
| |
registered friendly society or an incorporated friendly society, |
| 30 |
“incorporated friendly society” means a society incorporated under FSA |
| |
| |
“policy”, in relation to BLAGAB or eligible PHI business, includes an |
| |
instrument evidencing a contract to pay an annuity upon human life, |
| |
“registered branch” has the same meaning as in FSA 1992 (and includes |
| 35 |
any branch that as a result of section 96(3) of FSA 1992 is treated as a |
| |
| |
“registered friendly society” has the same meaning as in FSA 1992 (and |
| |
includes any society that as a result of section 96(2) of FSA 1992 is |
| |
treated as a registered friendly society). |
| 40 |
(2) | Any other expression which is used in this Part and in Part 2 has the same |
| |
meaning in this Part as in that Part. |
| |
|
| |
|
| |
|
(3) | References in this Part to a friendly society include, in the case of a registered |
| |
friendly society, references to any branch of that society. |
| |
(4) | It is declared that for the purposes of this Part (except where provision to the |
| |
contrary is made) a friendly society formed on the amalgamation of two or |
| |
more friendly societies is treated as different from the amalgamated societies. |
| 5 |
(5) | A registered friendly society formed on the amalgamation of two or more |
| |
friendly societies is treated for the purposes of this Part as registered not later |
| |
than 3 May 1966 if at the time of the amalgamation— |
| |
(a) | all the societies amalgamated were registered friendly societies eligible |
| |
for the exemption conferred by section 153, and |
| 10 |
(b) | at least one of them was an old society, |
| |
| or, if the amalgamation took place before 19 March 1985, the society was |
| |
treated as registered not later than 3 May 1966 as a result of the proviso to |
| |
section 337(4) of the Income and Corporation Taxes Act 1970. |
| |
(6) | An incorporated friendly society formed on the amalgamation of two or more |
| 15 |
friendly societies is treated for the purposes of this Part as a society which, |
| |
before its incorporation, was a registered friendly society registered not later |
| |
than 3 May 1966 if at the time of the amalgamation— |
| |
(a) | all the societies amalgamated were registered friendly societies eligible |
| |
for the exemption conferred by section 153, and |
| 20 |
(b) | at least one of them was an old society. |
| |
| |
| |
“FSA 1992” means the Friendly Societies Act 1992, and |
| |
“FISMA (Regulated Activities) Order 2001” means the Financial Services |
| 25 |
and Markets Act 2000 (Regulated Activities) Order 2001. |
| |
(2) | For abbreviations of other Acts, see section 226. |
| |
174 | Index of defined terms |
| |
In this Part the following expressions are defined or otherwise explained by the |
| |
| 30 |
| | | | | | basic life assurance and general annuity |
| | | | | business (abbreviated to “BLAGAB”) |
| | | | | BLAGAB or eligible PHI business |
| | | | | | | | 35 | | exempt BLAGAB or eligible PHI business |
| | | | | | | | | | | | | | | incorporated friendly society |
| | | |
|
|
| |
|
| |
|
| | | | | | insurance business transfer scheme |
| | | | | | | | | | | | | | | | sections 63(1) and 172(2) |
| | 5 | | | | | | | | sections 63(2) and 172(2) |
| | | | | | | | | | | | | | | | | 10 | | registered friendly society |
| | | | | | | | | | | | | |
|
|
| |
| 15 |
(1) | Any power of the Treasury to make any regulations under this Part is |
| |
exercisable by statutory instrument. |
| |
(2) | Any statutory instrument containing any regulations made by the Treasury |
| |
under this Part is subject to annulment in pursuance of a resolution of the |
| |
| 20 |
(3) | Nothing in this Part that authorises the inclusion of any particular kind of |
| |
provision in any regulations under this Part is to be read as restricting the |
| |
generality of the provision that may be included in the regulations. |
| |
Consequential amendments and transitional provision |
| |
176 | Consequential amendments |
| 25 |
Schedule 18 contains consequential amendments. |
| |
177 | Transitional provision |
| |
Schedule 19 contains transitional provision in connection with the coming into |
| |
| |
|
| |
|