The Income Tax (Deposit-takers) (Interest Payments)Regulations 1990

Explanatory Note

(This note is not part of the Regulations)

These Regulations, made under sections 480B and 482(11) of the Income and Corporation Taxes Act 1988 (“the 1988 Act”), prescribe the conditions which, if fulfilled, enable payments of interest by a deposit-taker to be made without deduction of tax, thereby disapplying section 480A of the 1988 Act (“section 480A”). They also provide for recovery of tax paid in the tax year in which the conditions are fulfilled, and for the furnishing of information to, and inspection of documents by, the Board in connection with payments of interest by deposit-takers under deduction of tax pursuant to section 480A or, in accordance with these Regulations, without deduction of tax.

Regulation 1 provides for citation, commencement and effect.

Regulation 2 contains definitions.

Regulation 3 defines the payments to which these Regulations apply.

Regulation 4 disapplies section 480A where the prescribed conditions set out in regulations 5, 6, 8 and 9 are fulfilled, and makes provision for recovery of tax paid.

Regulation 5 together with the Schedule prescribes the conditions relating to the giving and supply of a certificate to the effect that a person beneficially entitled to a payment of interest is unlikely to be liable to pay income tax for the tax year in which the payment is made.

Regulation 6 prescribes the condition that a certificate given under Regulation 5 continues to be valid and specifies the circumstances in which a certificate ceases to be valid.

Regulation 7 specifies the consequences of the Board issuing a notice under regulation 6 that tax is to be deducted from payments of interest in respect of an account held by a person who has given a certificate under regulation 5.

Regulation 8 prescribes the condition that payments of interest which are made in respect of an account of a class which, prior to 6th April 1991, had become obsolete, should in certain circumstances be made under deduction of tax.

Regulation 9 prescribes conditions relating to the giving of certificates in connection with joint accounts.

Regulations 10 to 13 provide for the furnishing of information to, and inspection of documents by, the Board in connection with payments of interest by deposit-takers under section 480A and these Regulations, and prescribe the purposes for which such information may be used.