Corporate tax | Commentary

D7.820 General

Corporate tax | Commentary

Corporation tax

D7.820 General

A building society1 is subject to corporation tax on its profits. For the purposes of computing the taxable profits a building society is treated as though it were a company2 except with regard to certain dividends and interest payable to investors (and income tax thereon), see D7.822.

With the exception of CCDS shares (D7.803), most shares issued by building societies fall within the loan relationship rules (see Division D1.7), because they are excluded from the definition of 'share' in CTA 2009, s 476(1). The result is that most of the incidental costs associated with the issue of the shares are relieved under the general loan relationship rules3. However it is possible that some building society shares do not qualify as loan relationships, or even if they do, some incidental costs may not fall within the general relieving loan relationship rules. It is therefore provided that incidental costs of issuing permanent interest bearing shares

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