Income and Corporation Taxes Act 1988

481 “Deposit-taker”, “deposit” and “relevant deposit”. U.K.

(1) In this section “the relevant provisions” means sections 479 and 480, this section and section 482 F1 .

[F2 (1A) In this section “the relevant provisions” also means sections 480A and 480C.]

(2) In the relevant provisions “deposit-taker” means any of the following—

(a) the Bank of England;

(b) any institution authorised under the M1 Banking Act 1987 or municipal bank within the meaning of that Act;

(c) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F4 (ca) any local authority;]

F5 (d) any company to which property and rights belonging to a trustee savings bank were transferred by section 3 of the M2 Trustee Savings Bank Act 1985;

F5 (e) any bank formed under the M3 Savings Bank (Scotland) Act 1819; and

(f) any person or class of person who receives deposits in the course of his business or activities and which is for the time being prescribed by order made by the Treasury for the purposes of this paragraph.

(3) M4 In the relevant provisions “deposits” means a sum of money paid on terms under which it will be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made.

(4) For the purposes of the relevant provisions a deposit is a relevant deposit if, but only if—

(a) the person who is beneficially entitled to any interest in respect of the deposit is an individual or, where two or more persons are so entitled, all of them are individuals; or

(b) in Scotland, the person who is so entitled is a partnership all the partners of which are individuals; or

(c) the person entitled to any such interest receives it as a personal representative in his capacity as such;[F6 or

(d) any interest in respect of the deposit is income arising to the trustees of a discretionary or accumulation trust in their capacity as such;]

and the deposit is not prevented from being a relevant deposit by [F7 any of subsections (5) to (5B)] below.

[F8 (4A) For the purposes of the relevant provisions a trust is a discretionary or accumulation trust if it is such that some or all of any income arising to the trustees would fall (unless treated as income of the settlor F9 . . . ) to be comprised for the year of assessment in which it arises in income to which section 686 applies.]

(5) A deposit is not a relevant deposit if—

(a) a qualifying certificate of deposit has been issued in respect of it or it is a qualifying time deposit;

(b) it is a debt on a debenture (“debenture” having the meaning given in section 744 of the M5 Companies Act 1985) issued by the deposit-taker;

(c) it is a loan made by a deposit-taker in the ordinary course of his business or activities;

(d) it is a debt on a security which is listed on a recognised stock exchange;

(e) it is a general client account deposit;

(f) it forms part of a premiums trust fund (within the meaning of [F10 section 184 of the Finance Act 1993) of an underwriting or former underwriting member] of Lloyd’s;

(g) it is made by a Stock Exchange money broker (recognised by the Bank of England) in the course of his business as such a broker;

(h) in the case of a deposit-taker resident in the United Kingdom for the purposes of income tax or corporation tax, it is held at a branch of his situated outside the United Kingdom;

(j) in the case of a deposit-taker who is not so resident, it is held otherwise than at a branch of his situated in the United Kingdom; or

(k) the appropriate person has declared in writing to the deposit-taker liable to pay interest in respect of the deposit F11 . . . —

(i) [F12 in a case falling within subsection (4)(a) or (b) above, that] at the time when the declaration is made, the person who is beneficially entitled to the interest is not, or, as the case may be, all the persons who are so entitled are not, ordinarily resident in the United Kingdom;

(ii) in a case falling within subsection (4)(c) above [F13 , that] the deceased was, immediately before his death, not ordinarily resident in the United Kingdom.

[F14 (iii) in a case falling within subsection (4)(d) above, that, at the time when the declaration is made, the trustees are not resident in the United Kingdom and do not have any reasonable grounds for believing that any of the beneficiaries of the trust is an individual who is ordinarily resident in the United Kingdom or a company which is resident in the United Kingdom.]

[F15 F16 (5A) In a case where—

(a) there is an arrangement falling within section 56A,

(b) the deposit is with a deposit-taker,

(c) no certificate of deposit, as defined in section 56(5), has been issued in respect of the right at the time the interest mentioned in section 480A or 480C is paid, and

(d) the conditions set out in paragraphs (a) and (b) in the definition of “qualifying certificate of deposit” in section 482(6) apply,

the deposit is not a relevant deposit.

[F15 (5B) In a case falling within subsection (4)(d) above, a deposit shall not be taken to be a relevant deposit in relation to a payment of interest in respect of that deposit if—

(a) the deposit was made before 6th April 1995; and

(b) the deposit-taker has not, at any time since that date but before the making of the payment, been given a notification by the Board or any of the trustees in question that interest in respect of that deposit is income arising to the trustees of a discretionary or accumulation trust.]]

(6) M6 The Treasury may by order make amendments in this section and sections [F17 480A, 480C] 479(2) to (7), 480 F18 and 482 providing for deposits of a kind specified in the order to be or, as the case may be, not to be relevant deposits in relation to all deposit-takers or such deposit-takers or classes of deposit-takers as may be so specified.

Textual Amendments

F1 Words "sections 479 and 480" repealed by 1990 s.132 and Sch.19 Part IV on and after 6 April 1991

F2 1990 s. 30 and Sch. 5 para. 8(2)

F3 S. 481(2)(c) repealed (26.3.2001) by The Postal Services Act 2000 (Consequential Modifications No. 1) Order 2001 (S.I. 2001/1149), art. 1(2), Sch. 2

F4 1990 s. 30 and Sch. 5 para. 8(3) as regards interest paid or credited on or after 6 April 1991

F5 Subs (d) and (e) omitted by 1990 s.30 and Sch. 5 para. 8(3)(5) and s.132 and Sch.19 Part IV as regards interest paid or credited on or after 6 April 1991

F6 S. 481(4)(d) and word inserted (with effect in accordance with s. 86(10) of the amending Act) by Finance Act 1995 (c. 4), s. 86(1) (with s. 86(14))

F7 Words in s. 481(4) substituted (with effect in accordance with s. 86(10) of the amending Act) by Finance Act 1995 (c. 4), s. 86(1) (with s. 86(14))

F8 S. 481(4A) inserted (with effect in accordance with s. 86(10) of the amending Act) by Finance Act 1995 (c. 4), s. 86(2) (with s. 86(14))

F9 Words in s. 481(4A) repealed (with effect in accordance with Sch. 7 para. 12(4) of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(7), Note 1

F10 Words in s. 481(5)(f) substituted (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by 1993 c. 34, ss. 183(2), 184(3)

F11 Word in s. 481(5)(k) repealed (with effect in accordance with s. 86(10) of the repealing Act) by Finance Act 1995 (c. 4), s. 86(3)(a), Sch. 29 Pt. 8(11), Note

F12 Words in s. 481(5)(k)(i) inserted (with effect in accordance with s. 86(10) of the amending Act) by Finance Act 1995 (c. 4), s. 86(3)(b) (with s. 86(14))

F13 Word in s. s. 481(5)(k)(ii) inserted (with effect in accordance with s. 86(10) of the amending Act) by Finance Act 1995 (c. 4), s. 86(3)(c) (with s. 86(14))

F14 S. 481(5)(k)(iii) inserted (with effect in accordance with s. 86(10) of the amending Act) by Finance Act 1995 (c. 4), s. 86(3)(d) (with s. 86(14))

F15 S. 481(5B) inserted (with effect in accordance with s. 86(10) of the amending Act) by Finance Act 1995 (c. 4), s. 86(4) (with s. 86(14))

F16 S. 481(5A) inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 34, Sch. 8 paras. 4, 6

F17 1990 s. 30 and Sch. 5 para. 8(4)

F18 Words "479(2) to (7), 480" repealed by 1990 s.132 and Sch.19 Part IV on and after 6 April 1991

Marginal Citations

M1 1987 c. 22.

M2 1985 c. 58.

M3 1819 c. 62.

M4 Source—1984 Sch.8 3(1)-(3); 1985 s.38(3), (4)

M5 1985 c. 6.

M6 Source—1984 Sch.8 3A(1); 1985 s.38(7)