CTM40580 - Particular bodies: registered societies: agricultural and fishing co-operatives treated as registered societies

CTA10/S1057 and S1058, ITTOIA05/S379

CTA10/S1058 and ITTOIA05/S379 define a ‘UK agricultural or fishing co-operative’ as a co-operative association (which may be an incorporated company or an unincorporated association) that is

• established in the UK and UK resident, and

• carrying on agricultural or horticultural business on land occupied by them in the UK, or

• carrying on business consisting of the catching of fish or shellfish.

For this purpose a co-operative association means a body with a written constitution from which the Secretary of State is satisfied that it is in substance a co-operative association..

Such associations receive similar treatment to registered societies as regards interest and share dividends – CTA10/S1055. See CTM40520.

In the hands of the members share interest is treated as interest for tax purposes, ITTOIA05/S379.

Where such a co-operative association claims exemption from tax on trading income on the grounds of mutual trading see CTM40950 onwards.

If two such associations amalgamate, a disposal of assets does not give rise to a capital gain chargeable to CT.

An association that satisfies the appropriate authority receives a certificate to that effect and should be asked to produce it. Where the date from which an association qualifies is the commencing date of a CT accounting period, the relevant tax treatment – loan relationship debit (CTA09/S499) or deduction from profits (CTA09/S132 should be applied for that and succeeding accounting periods without further enquiry.

In other cases, the first accounting period for which CTA10/S1056 should be applied is the accounting period succeeding that in which the date of qualification falls. Where an association to which a certificate has been granted ceases to qualify for this treatment (for example, because of a change in constitution), the local office concerned is notified by CTIS (Technical) of the effective date.