Section 132 — Corporation Tax Act 2009: Dividends etc granted by registered societies

Dividends etc granted by registered societies 132 1 This section applies if a trade is carried on by a registered society and—

a the society does not sell to persons who are not its members, or b the number of shares in the society is not limited by the society's rules or practice.

2 In calculating the profits of the trade, a deduction is allowed for sums which meet conditions A and B.

3 Condition A is that—

a the sum represents a discount, rebate, dividend or bonus granted by the society to a member or other person (“ the recipient ”),

b the discount, rebate, dividend or bonus is in respect of—

i amounts paid or payable by the recipient, or ii amounts paid or payable to the recipient, on account of the recipient's transactions with the society, and c those transactions are taken into account in calculating the society's profits chargeable under this Part.

4 Condition B is that the sum mentioned in subsection (2) is calculated by reference to—

a the amounts paid or payable by or to the recipient, or b the size of the transactions, and not by reference to the amount of any share or interest in the capital of the society.

5 See also section 1056 of CTA 2010 (dividend or bonus to which this section applies is not treated as a distribution).