What is the new law applying to the demutualisation of friendly societies?
After the demutualisation of Manchester Unity took place, a change was made to the law. The change relates to how capital gains tax (CGT) applies to you if you are a member of a friendly society and you receive cash, shares or rights to acquire shares because the friendly society has demutualised. The changes are contained in Tax Laws Amendment (2009 Measures No. 4) Act 2009. Under the new law, if you received an amount of money when your friendly society demutualised you will be provided with a ‘cost base’ for your membership interests they disposed of under the demutualisation. You will need to know this cost base to work out whether you have made a capital gain or capital loss.
