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HMRC internal manual

Company Taxation Manual

Particular bodies: friendly societies: general scheme of taxation

All friendly societies are treated as companies for CT purposes.  An incorporated friendly society is a company as usually understood in its own right.  Registered and unregistered friendly societies are unincorporated associations (and so taxed as companies - see CTM00510). FA12/S151 provides that The Corporation Tax Acts apply in a similar way to friendly sovieties as they apply to mutual insurance companies.

Although friendly societies are chargeable to CT, they may claim two specific exemptions,  described in the following paragraphs.  Any society which has income or profits not covered by the exemptions should be reviewed by LB (Financial) – refer to the Sector Lead.  Other offices should hold files only for societies with profits that are wholly exempt, and the involvement of such offices will be limited to dealing with claims to repayment as a result of the exemptions.

If a society which has previously only carried on tax exempt business starts to engage in taxable activities, its file should be sent to CTIS (Insurance) who will arrange for its transfer.

Unregistered friendly societies: limited exemption from CT

An unregistered friendly society with income not exceeding £160 is exempt from CT (FA12/S17).  This exemption covers both income and chargeable gains. When a society first claims exemption under this section its file, including the rules of the society, should be referred to CTIS (Insurance).