493. Registered societies.

Any dividend, bonus or other sum payable to a shareholder in a registered society or a UK agricultural or fishing co-operative is treated for the purposes of corporation tax as interest under a loan relationship of the society or co-operative if it is payable by reference to the amount of the shareholder's holding in its share capital1.

Interest paid by a registered society in respect of a mortgage, loan, loan stock or deposit is not a distribution for corporation tax purposes2. If any dividend, bonus, interest or other sum: (1) is paid to a shareholder in a registered society; and