1(1)Section 349 of the Taxes Act 1988 (annual interest etc.) shall be amended as follows.U.K.
(2)In subsection (2)(a), after “company” there shall be inserted “(other than a building society) ”.
(3)In subsection (3), paragraph (e) shall be omitted.
(4)After subsection (3) there shall be inserted—
“(3A)Subject to subsection (3B) below and to any other provision to the contrary in the Income Tax Acts, where—
(a)any dividend or interest is paid in respect of a security issued by a building society other than a qualifying certificate of deposit, and
(b)the security was quoted, or capable of being quoted, on a recognised stock exchange at the time the dividend or interest became payable,
the person by or through whom the payment is made shall, on making the payment, deduct out of it a sum representing the amount of income tax thereon for the year in which the payment is made.
(3B)Subsection (3A) above does not apply to any payment to which section 124 applies.”
(5)In subsection (4), for “subsection (3)(e) above” there shall be substituted “this section ” and for the words from “and” to the end there shall be substituted—
“ “qualifying certificate of deposit means a certificate of deposit, as defined in section 56(5), under which—
(a)the amount payable by the issuing society, exclusive of interest, is not less than £50,000 (or, for a deposit denominated in foreign currency, not less than the equivalent of £50,000 at the time when the deposit is made), and
(b)the obligation of the society to pay that amount arises after a period of not more than five years beginning with the date on which the deposit is made; and
“security includes share.”