Income Tax Act 2007

Deposit-takers and relevant investments

853 Meaning of “deposit-taker”

(1) In this Chapter “deposit-taker” means—

(a) the Bank of England, or

(b) a person to whom one of the following subsections or section 854 applies.

(2) This subsection applies to a person—

(a) who has permission under Part 4 of FISMA 2000 to accept deposits which are relevant investments, and

(b) who is not—

(i) a building society,

(ii) a society registered within the meaning of the Friendly Societies Act 1974 (c. 46) or incorporated under the Friendly Societies Act 1992 (c. 40),

(iii) a society registered as a credit union under the Industrial and Provident Societies Act 1965 (c. 12) or the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)), or

(iv) an insurance company within the meaning of section 275 of FA 2004.

(3) This subsection applies to a company within the meaning of the Companies Act 1985 (c. 6)—

(a) in respect of which a resolution has been passed by a local authority under—

(i) section 48(3) of the Banking Act 1979 (c. 37), or

(ii) section 103(3) of the Banking Act 1987 (c. 22), and

(b) which is exempt from the prohibition in section 19 of FISMA 2000 on accepting deposits which are relevant investments.

(4) This subsection applies to a local authority.

(5) This subsection applies to an EEA firm which—

(a) is of the kind mentioned in paragraph 5(b) of Schedule 3 to FISMA 2000 (EEA passport rights), and

(b) has permission under paragraph 15 of that Schedule to accept deposits (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule).

(6) This subsection applies to a person—

(a) who is authorised for the purposes of FISMA 2000, and

(b) whose business consists wholly or mainly of dealing in financial instruments as principal.

For the meaning of “financial instrument”, see section 984.

854 Power to prescribe persons as deposit-takers

(1) This section applies to a person who receives deposits in the course of carrying on business or activities and—

(a) is for the time being prescribed by order by the Treasury for the purposes of this section, or

(b) is a member of a class of persons which is for the time being so prescribed.

(2) An order under this section may prescribe a person or class of person—

(a) in relation to all deposits which are relevant investments, or

(b) in relation to deposits which are relevant investments of a kind specified in the order.

(3) If a person is prescribed only in relation to deposits which are relevant investments of a kind specified in the order, the reference in section 851(1)(b) to “relevant investment” is to be read as a reference only to relevant investments of the kind so specified.

855 Meaning of “investment” and “deposit”

(1) In this Chapter “investment” means—

(a) a deposit with a deposit-taker,

(b) a deposit with a building society,

(c) shares in a building society, or

(d) a loan to a building society.

(2) In this Chapter “deposit” means a sum of money paid on terms which mean that it will be repaid (with or without interest)—

(a) on demand, or

(b) at a time or in circumstances agreed by or on behalf of the person who pays it and the person who receives it.

856 Investments which are relevant investments

(1) An investment is a relevant investment for the purposes of this Chapter if it meets—

(a) the individual interest condition (see subsection (3)),

(b) the Scottish partnership condition (see subsection (4)),

(c) the personal representative condition (see subsection (5)), or

(d) the settlement condition (see subsection (6)).

(2) But an investment is not a relevant investment if any of sections 858 to 870 prevent it from being a relevant investment.

(3) An investment meets the individual interest condition if the only persons beneficially entitled to interest on the investment are individuals.

(4) An investment meets the Scottish partnership condition if—

(a) a Scottish partnership is beneficially entitled to all interest on the investment, and

(b) that partnership consists only of individuals.

(5) An investment meets the personal representative condition if personal representatives are entitled to any interest on the investment and they receive it in that capacity.

(6) An investment meets the settlement condition if all interest on the investment is income arising to the trustees of a discretionary or accumulation settlement and they receive it in that capacity.

For the meaning of “discretionary or accumulation settlement”, see section 873(1).

857 Investments to be treated as being or as not being relevant investments

(1) A deposit-taker or building society must treat every investment with it as a relevant investment unless satisfied that the investment is not a relevant investment.

(2) If a deposit-taker or building society is satisfied that an investment is not a relevant investment, it may continue to treat the investment as not being a relevant investment until subsection (3) applies.

(3) This subsection applies when the deposit-taker or building society has information which can reasonably be taken to indicate that the investment is or may be a relevant investment.