Income Tax (Trading and Other Income) Act 2005 section 379

Payments by registered societies or certain co-operatives

Section 379 explains how dividends, bonuses and other payments made by registered societies and certain UK agricultural or fishing co-operatives to their shareholders are treated as interest for income tax purposes.

• Any dividend, bonus or other sum paid to a shareholder in a registered society or a UK agricultural or fishing co-operative is treated as interest for income tax, provided it is calculated by reference to the shareholder's holding in the society's share capital.
• Registered societies include those registered under the Co-operative and Community Benefit Societies Act 2014, societies registered under equivalent Northern Ireland legislation, Northern Ireland credit unions, and European Cooperative Societies (SCEs).
• A UK agricultural or fishing co-operative must be established and resident in the United Kingdom, and its primary purpose must be assisting members with agricultural, horticultural, fishing or shellfish businesses.
• Whether a body qualifies as a co-operative association is determined by the Secretary of State (or in Northern Ireland, the Department of Agriculture and Rural Development) based on its written constitution and how its income is applied for the benefit of its members.