Income Tax Act 2007 (c. 3)

Part 15 U.K. Deduction of income tax at source

Modifications etc. (not altering text)

C1 Pt. 15 modified (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 551(4), 1329(1) (with Pts. 1, 2, Sch. 2 para. 78)

Chapter 3 U.K. Deduction from certain payments of yearly interest

Exceptions from duty to deduct U.K.

886 Interest paid by recognised clearing houses etc U.K.

(1) The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest made by a recognised clearing house (“RCH”) or recognised investment exchange (“RIE”) if—

(a) the RCH or RIE is carrying on business as the provider of a central counterparty clearing service, and

(b) the interest is paid in the ordinary course of that business, on margin or other collateral deposited with it by users of the service.

(2) The duty to deduct a sum representing income tax under section 874 does not apply to interest treated by virtue of section 607 (treatment of price differences under repos)[F1 , or paragraph 5 of Schedule 13 to FA 2007 (relief for borrower for finance charges in case of debtor repos and debtor quasi-repos),] as paid by an RCH or RIE in respect of contracts made by it as the provider of a central counterparty clearing service.

(3) In this section—

• “central counterparty clearing service” means the service provided by an RCH or RIE to the parties to a transaction where there are contracts between each of the parties and the RCH or RIE (in place of, or as an alternative to, a contract directly between the parties), and

• “recognised clearing house” and “recognised investment exchange” have the same meaning as in FISMA 2000 (see section 285 of that Act).

Textual Amendments

F1 Words in s. 886(2) inserted (with effect in accordance with art. 3 of the commencing S.I.) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 24; S.I. 2007/2483, art. 3