Income Tax Act 2007

Deposit-takers and relevant investments U.K.

853 Meaning of “deposit-taker” U.K.

(1) In this Chapter [F1 and section 876] “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 [F2 the Co-operative and Community Benefit Societies Act 2014] 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 [F3 as defined in section 1(1) of the Companies Act 2006 (c. 46)] —

(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.

F4 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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.

Textual Amendments

F1 Words in s. 853(1) inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2016 (c. 24), Sch. 6 para. 7

F2 Words in s. 853(2)(b)(iii) substituted (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 154, Sch. 4 para. 108 (with Sch. 5)

F3 Words in s. 853(3) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2009 (S.I. 2009/1890), arts. 1(1), 3(2)(b)

F4 S. 853(5) omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 15(10) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

854 Power to prescribe persons as deposit-takers U.K.

(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 [F5 876(1)(b)] to “relevant investment” is to be read as a reference only to relevant investments of the kind so specified.

Textual Amendments

F5 Word in s. 854(3) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2016 (c. 24), Sch. 6 para. 8

855 Meaning of “investment” and “deposit” U.K.

[F6 (1) In this Chapter, and section 876, “investment” means a deposit with a deposit-taker.]

(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.

Textual Amendments

F6 S. 855(1) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2016 (c. 24), Sch. 6 para. 9

856 Investments which are relevant investments U.K.

(1) An investment is a relevant investment for the purposes of [F7 section 876] 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 [F8 863] 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).

Textual Amendments

F7 Words in s. 856(1) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2016 (c. 24), Sch. 6 para. 10(2)

F8 Word in s. 856(2) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2016 (c. 24), Sch. 6 para. 10(3)

857 Investments to be treated as being or as not being relevant investments U.K.

(1) A deposit-taker F9 ... 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 F9 ... 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 F9 ... has information which can reasonably be taken to indicate that the investment is or may be a relevant investment.

Textual Amendments

F9 Words in s. 857 omitted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 6 para. 11