LAM17030 - Summary of鈥� friendly society 鈥痩ong-term business provisions: FA12/PART3/S150-179鈥�
Registered, unregistered and incorporated friendly societies are subject to corporation tax. The Corporation Tax Acts use the term 鈥渃ompany鈥� to apply not only to companies but also to unincorporated associations (such as unregistered and registered friendly societies) and bodies corporate that are not companies (such as incorporated friendly societies) (CTA10/S1121).
The main long-term business provisions are:
| Reference FA12 | Summary | LAM Reference |
|---|---|---|
| S151 | CT rules apply to friendly societies as for mutual life assurance companies subject to exemptions and regulations (SI2012/3008) | LAM17020 |
| S152 | Friendly societies subject to transfer of business rules | LAM13090 |
| S153 | Exemption for certain BLAGAB or eligible PHI business | LAM17040 to 17150 |
| S158 | BLAGAB and eligible PHI - transfers from friendly societies to insurance companies etc. | LAM17160 |
| S164 | Societies registered before 1 June 1973 etc. | LAM17140 |
| S165 | Incorporated friendly societies - a special exemption from corporation tax for 鈥渞elevant other business鈥� | LAM17150 |
| S166 | Relevant other business - transfers from friendly societies etc. | LAM17160 |
| S167 | Relevant other business - transfers between friendly societies | LAM17170 |
| S171 | An exemption for unregistered friendly societies with income of less than 拢160 per annum | LAM17210 |
Key terms are defined in the body of the text as they arise and in FA12/S172.
Other provisions in this manual particularly relevant to friendly societies in calculating the tax charge are:
LAM06060 - I-E Profit: Calculation of the tax charge: No reliefs to be given against the policyholders鈥� share of I-E profits FA12/S127
LAM07010 - Trade profits: Introduction - BLAGAB and non-BLAGAB trade profits and losses: FA12/S66
LAM13090 - Transfers of long-term business: friendly societies: FA12/S152
There is further guidance on the taxation of friendly societies in the following manuals:
General Insurance Manual: GIM1200 - The UK Market: friendly societies
Capital Gains Manual: CG41600 to CG41614
Company Taxation Manual: CTM40305 to CTM40345
Insurance Policyholder Taxation Manual: IPTM8400
VAT Registration guidance: VATREG11200
The I-E treatment of mutual business: LAM02050
Trading profits on long-term insurance business carried out on a mutual basis are not subject to corporation tax under normal principles and explicit reference is made in FA12/S71(3) to excluding mutual business profits from the charge to corporation tax as non-BLAGAB.