Dividends and interest on most securities issued by building societies which are freely transferable will be payable net of basic rate income tax – this includes the form of capital known as permanent interest-bearing shares (PIBS) (see ¶805-860, but see also however, the provisions in respect of core capital deferred shares at ¶805-865). The societies will generally be entitled to a trading deduction for the gross amount provided that they account for the tax deductible but the deduction is limited to a normal commercial rate.

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