699 Deduction as expenses of certain sums, etc

Summary

This section provides that certain sums are allowed to be deducted as expenses in computing the profits or gains of an industrial or provident society chargeable to tax under Case I of Schedule D. The sums so allowable are certain discounts, rebates, dividends or bonuses granted to members of the society and share or loan interest paid by the society for the purposes of the trade. The section also provides that any writing-down allowance, balancing allowance or balancing charge to be made to or on a society in respect of capital expenditure incurred on the construction of a building or structure, or on the purchase of patent rights, is to be calculated as if the capital allowances or charges which, but for the fact the society was exempt from tax, would have been made to or on to the society in respect of that expenditure for the year 1962–63 or earlier had in fact been made.

Details

Deductions

(1) In determining the profits or gains of an industrial or provident society chargeable under Case I of Schedule D, the following deductions are allowed —

• discounts, rebates, dividends or bonuses granted by the society to the members of the society or other persons which are calculated by reference to the size of their transactions with the society, and
• share or loan interest paid by the society wholly and exclusively for the purposes of the trade.

Capital allowances

(2)(a) Where a writing-down allowance, balancing allowance or balancing charge is to be made to or on an industrial or provident society in respect of capital expenditure incurred on the construction of a building or structure, it is to be calculated as if every annual allowance, balancing allowance or balancing charge which, but for the fact the society was exempt from income tax at the time, would have been made to or on the society for the year 1962–63 and earlier years in respect of that expenditure had in fact been made.

(2)(b) Where a balancing allowance or balancing charge is to be made to or on an industrial or provident society in respect of capital expenditure incurred on the purchase of patent rights, it is to be calculated as if every annual allowance which, but for the fact the society was exempt from income tax at the time, would have been made to or on the society for the year 1962–63 and earlier years in respect of that expenditure had in fact been made.

Relevant Date: Finance Act 2021