Details of the Section
2.Subsection (1) amends section 866(1) of the Income Tax Act 2007 (ITA 2007). Section 866(1) provides that an investment which is a qualifying time deposit is not a ‘relevant investment’ for the purposes of Chapter 2, Part 15 of ITA 2007 (concerning deduction of sums representing income tax by deposit-takers and building societies from payments of interest on relevant investments). Interest payments in respect of qualifying time deposits are therefore excluded from the tax-deduction requirements set out at Chapter 2, Part 15 of ITA 2007.
3.Subsection (1) restricts this exclusion, so it applies only to interest payments in respect of qualifying time deposits made before 6 April 2012. A qualifying time deposit made on or after 6 April 2012 will by virtue of the amendment made by subsection (1) be a ‘relevant investment’ for the purposes of Chapter 2, Part 15 of ITA 2007. Building societies, banks and other deposit-takers will therefore be required to deduct sums representing income tax at the basic rate from interest payments they make on these investments.
4.Subsection (2) provides that this section will be treated as having come into force on 6 April 2012.
