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Income Tax Bill


Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 2 — Deduction by deposit-takers and building societies

398

 

Deposit-takers and relevant investments

786     

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 787

5

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—

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(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

15

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

20

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

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(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

30

(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—

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(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 917.

787     

Power to prescribe persons as deposit-takers

40

(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

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 2 — Deduction by deposit-takers and building societies

399

 

(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

5

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 784(1)(b)

to “relevant investment” is to be read as a reference only to relevant

investments of the kind so specified.

10

788     

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

15

(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

20

pays it and the person who receives it.

789     

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)),

25

(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 791 to 803

prevent it from being a relevant investment.

30

(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

35

(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

40

is income arising to the trustees of a discretionary or accumulation settlement

and they receive it in that capacity.

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 2 — Deduction by deposit-takers and building societies

400

 

   

For the meaning of “discretionary or accumulation settlement”, see section

806(1).

790     

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

5

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

10

information which can reasonably be taken to indicate that the investment is or

may be a relevant investment.

Investments which are not relevant investments: non-UK resident beneficiaries

791     

Declarations of non-UK residence: individuals

(1)   

This section applies to an investment with a deposit-taker or building society

15

which meets the individual interest condition in section 789(3).

(2)   

The investment is not a relevant investment if—

(a)   

an appropriate person has made the declaration set out in subsection

(3) to the deposit-taker or building society,

(b)   

the declaration contains the undertaking set out in subsection (4),

20

(c)   

the declaration contains the name and principal residential address of

the individual or (as the case may be) each of the individuals entitled to

the interest,

(d)   

the declaration contains such other information as the Commissioners

for Her Majesty’s Revenue and Customs may reasonably require, and

25

(e)   

the declaration is in such form as the Commissioners may prescribe or

authorise.

(3)   

The declaration is that, at the time when the declaration is made—

(a)   

the person who is beneficially entitled to the interest is not ordinarily

UK resident, or

30

(b)   

(as the case may be) all the persons who are so entitled are not

ordinarily UK resident.

(4)   

The undertaking is an undertaking by the person making it to notify the person

to whom it is made if any individual in respect of whom it is made becomes

ordinarily UK resident.

35

(5)   

In this section “appropriate person” means—

(a)   

a person who is beneficially entitled to interest on the investment, or

(b)   

a person to whom any such interest is payable.

792     

Declarations of non-UK residence: Scottish partnerships

(1)   

This section applies to an investment with a deposit-taker or building society

40

which meets the Scottish partnership condition in section 789(4).

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 2 — Deduction by deposit-takers and building societies

401

 

(2)   

The investment is not a relevant investment if—

(a)   

an appropriate person has made the declaration set out in subsection

(3) to the deposit-taker or building society,

(b)   

the declaration contains the undertaking set out in subsection (4),

(c)   

the declaration contains the name and principal residential address of

5

each of the partners,

(d)   

the declaration contains such other information as the Commissioners

for Her Majesty’s Revenue and Customs may reasonably require, and

(e)   

the declaration is in such form as the Commissioners may prescribe or

authorise.

10

(3)   

The declaration is that, at the time when the declaration is made, all of the

partners of the partnership are not ordinarily UK resident.

(4)   

The undertaking is an undertaking by the person making it to notify the person

to whom it is made if any partner in respect of whom it is made becomes

ordinarily UK resident.

15

(5)   

In this section “appropriate person” means—

(a)   

the partnership that is beneficially entitled to the interest on the

investment, or

(b)   

a person to whom any such interest is payable.

793     

Declarations of non-UK residence: personal representatives

20

(1)   

This section applies to an investment with a deposit-taker or building society

which meets the personal representative condition in section 789(5).

(2)   

The investment is not a relevant investment if—

(a)   

an appropriate person has made the declaration set out in subsection

(3) to the deposit-taker or building society,

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(b)   

the declaration contains such information as the Commissioners for

Her Majesty’s Revenue and Customs may reasonably require, and

(c)   

the declaration is in such form as the Commissioners may prescribe or

authorise.

(3)   

The declaration is that the deceased was not ordinarily UK resident

30

immediately before the deceased’s death.

(4)   

In this section “appropriate person” means—

(a)   

any of the personal representatives who are entitled to receive interest

on the investment, or

(b)   

a person to whom any such interest is payable.

35

794     

Declarations of non-UK residence: settlements

(1)   

This section applies to an investment with a deposit-taker or building society

which meets the settlement condition in section 789(6).

(2)   

The investment is not a relevant investment if—

(a)   

an appropriate person has made the declaration set out in subsection

40

(3) to the deposit-taker or building society,

(b)   

the declaration contains the undertaking set out in subsection (4),

(c)   

the declaration contains such information as the Commissioners for

Her Majesty’s Revenue and Customs may reasonably require, and

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 2 — Deduction by deposit-takers and building societies

402

 

(d)   

the declaration is in such form as the Commissioners may prescribe or

authorise.

(3)   

The declaration is that, at the time when the declaration is made—

(a)   

the trustees who are entitled to the interest are non-UK resident (see

section 475), and

5

(b)   

no person who is a trustee has reasonable grounds for believing that

any beneficiary under the settlement is—

(i)   

an individual who is ordinarily UK resident,

(ii)   

a company which is UK resident, or

(iii)   

a Scottish partnership any of the partners of which is an

10

individual who is ordinarily UK resident or a company which

is UK resident.

(4)   

The undertaking is an undertaking by the person making it to notify the person

to whom it is made if—

(a)   

the trustees become UK resident,

15

(b)   

an individual in respect of whom it is made becomes ordinarily UK

resident,

(c)   

a company in respect of which it is made becomes UK resident,

(d)   

an individual partner in any Scottish partnership in respect of which it

is made becomes ordinarily UK resident,

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(e)   

a company partner in any Scottish partnership in respect of which it is

made becomes UK resident,

(f)   

a partner who is an ordinarily UK resident individual or a UK resident

company joins any Scottish partnership in respect of which it is made,

or

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(g)   

a person within any of sub-paragraphs (i) to (iii) of subsection (3)(b)

becomes or is found to be a beneficiary under the settlement to which

the declaration relates.

(5)   

In this section “appropriate person” means—

(a)   

any person who is a trustee entitled to receive interest on the

30

investment, or

(b)   

a person to whom any such interest is payable.

(6)   

References in this section to a beneficiary under the settlement are to be

construed in accordance with section 806(3) (meaning of “beneficiary under a

discretionary or accumulation settlement”).

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795     

Inspection of declarations

(1)   

This section applies if an officer of Revenue and Customs by notice requires a

deposit-taker or building society to make available for inspection the

declarations made to it under sections 791 to 794 which are referred to in the

notice.

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(2)   

The deposit-taker or building society must make the declarations available for

inspection—

(a)   

by an officer of Revenue and Customs who is named in the notice, and

(b)   

within such time as the notice may specify.

(3)   

An officer of Revenue and Customs to whom the declarations must be made

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available may take copies or extracts from them.

 
 

 
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