[HMRC Tax Bulletin 34, April 1998]

We have been asked to set out our views on the tax treatment of so-called “windfall” pay-outs which are made as a result of the de-mutualisation of a building society or similar mutual society. These pay-outs will generally take the form of shares in the successor company, referred to here as the “free shares”, or cash payments, referred to here as the “cash bonus”.