(1) After section 340 of the Income and Corporation Taxes Act 1970 there shall be inserted the following section -
"340A Credit Unions.
(1) Subject to subsection (2) below, in computing for the purposes of corporation tax the income of a credit union for any accounting period -
(a) neither the activity of the credit union in making loams to its members nor in placing on deposit or otherwise investing from time to time its surplus funds shall be regarded as the carrying on of a trade or part of a trade; and
(b) interest received by the credit union on loans made by it to its members shall not be chargeable to tax under Case III of Schedule D or otherwise.
(2) Paragraph (b) of subsection (1) above shall not apply to an accounting period of a credit union for which the credit union is obliged to make a return under section 340(5) of this Act and has not done so within three months after the end of that accounting period or such longer period as the inspector shall allow.
(3) No share