D7.730 Building societies—overview
For the latest New Development, see ND.2605.
For many taxation rules, building societies are treated in the same way as banks. See the overview at D7.701 and under 'Corporation tax and building societies' below for more details. There are a number of provisions specific to building societies, due to their unique corporate structure. These are discussed below.
Share capital of building societies
As building societies are mutual organisations, their constitution prevents them from issuing ordinary share capital in the same way as other companies. They are, however, able to issue certain types of deferred shares which qualify as core (Tier 1) capital for regulatory purposes. They are also able to issue permanent interest bearing shares (PIBS) which do not qualify as core tier 1 capital. PIBS are 'shares' for the purposes of the Building Societies Act 1986 but strictly speaking they are debt instruments with interest coupons, and so are taxed differently to shares (see below).
Core capital deferred shares
Capital instruments (deferred shares, or existing securities converted into deferred shares), called core capital
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to Tolley+™ Research or register for a free trial
Web page updated on 17 Mar 2025 16:32