Income Tax (Trading and Other Income) Act 2005

Charge to tax on interest U.K.

369 Charge to tax on interest U.K.

(1) Income tax is charged on interest.

(2) The following sections extend what is treated as interest for certain purposes—

• section 372 (building society dividends),

• section 373 (open-ended investment company interest distributions),

• section 376 (authorised unit trust interest distributions),

• [F1 section 378A (offshore fund distributions),]

• section 379 (industrial and provident society payments),

• section 380 (funding bonds),

• [F2 section 380A (FSCS payments representing interest),] and

• section 381 (discounts).

(3) For exemptions, see in particular—

(a) Chapter 2 of Part 6 (national savings income),

(b) Chapter 3 of Part 6 (income from individual investment plans),

(c) Chapter 4 of Part 6 (SAYE interest),

(d) Chapter 6 of Part 6 (income from FOTRA securities),

(e) sections 749 to [F3 756A](interest arising from repayment supplements, tax reserve certificates, damages for personal injury, employees' share schemes, repayments of student loans, the redemption of funding bonds [F4 , certain foreign currency securities and interest on certain deposits of victims of National-Socialist persecution)] , and

(f) sections 757 to 767 (interest and royalty payments).

(4) Subsection (1) is also subject to [F5 Chapter 3 of Part 12 of ITA 2007 (exemption for interest on securities to which Chapter 2 of that Part applies)] .

[F6 (5) See also Chapter 3A of Part 14 of ITA 2007 (which provides for the receipts of certain types of company being wound up to be charged to income tax under that Chapter instead of under any other provision that would otherwise apply).]

Textual Amendments

F1 Words in s. 369(2) inserted (with effect in accordance with s. 39(5) of the amending Act) by Finance Act 2009 (c. 10), s. 39(2)

F2 Words in s. 369(2) inserted (with effect in accordance with s. 33(5) of the amending Act) by Finance Act 2009 (c. 10), s. 33(2)

F3 Word in s. 369(3)(e) substituted (19.7.2006) by Finance Act 2006 (c. 25), s. 64(1)(a)

F4 Words in s. 369(3)(e) substituted (19.7.2006) by Finance Act 2006 (c. 25), s. 64(1)(b)

F5 Words in s. 369(4) substituted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 513 (with transitional provisions and savings in Sch. 2)

F6 S. 369(5) inserted (1.4.2010) (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 7 para. 67 (with Sch. 9 paras. 1-9, 22)

370 Income charged U.K.

(1) Tax is charged under this Chapter on the full amount of the interest arising in the tax year.

(2) Subsection (1) is subject to Part 8 (foreign income: special rules).

371 Person liable U.K.

The person liable for any tax charged under this Chapter is the person receiving or entitled to the interest.