Taxes Consolidation Act 1997 section 699

Deduction as expenses of certain sums, etc

Section 699 sets out the deductions that may be claimed by an industrial and provident society in computing its trading profits, and provides that certain payments made by such a society are not treated as distributions.

• When computing Case I profits of an industrial and provident society, discounts, rebates, dividends or bonuses granted to members or others are deductible, provided they are calculated by reference to the size of their transactions with the society and not by reference to the size of their shareholding or capital interest.
• Share interest and loan interest paid by the society are deductible where the interest is wholly and exclusively laid out for the purposes of the trade; where such interest exceeds trading income, the excess is treated as a trading loss available for relief under section 396.
• Share and loan interest paid by an industrial and provident society, and dividends or bonuses within the meaning of section 699, are not treated as distributions for corporation tax purposes; the interest is payable without deduction of tax (unless payable to a person outside the State) and is chargeable on the recipient under Case III of Schedule D.
• Where share or loan interest is not deductible as a Case I or Case V expense (for example, where the society holds investments rather than trades), it is treated as a charge on income under section 700(2), subject to the restrictions in section 243(8).