mutual trading

Show Summary Details

Quick Reference

The situation in which the income of a company arises solely from contributions by its members, the members being the owners of the company. The same provisions apply where the entity is an association and not a company. Historically, many insurance companies were created as mutuals, as were the building societies. The ‘profits’ of mutual trading are not subject to UK corporation tax as they are not, strictly speaking, profit but are more correctly regarded as a surplus of contributions.

Subjects: Accounting — Law.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.