C2Part 15Deduction of income tax at source
C1Chapter 9Manufactured payments
Pt. 15 Ch. 9 modified (with effect in accordance with art. 2 of the commencing S.I.) by Finance Act 2007 (c. 11), s. 47(4), Sch. 13 para. 13; S.I. 2007/2483, art. 2
Manufactured interest
919Manufactured interest on UK securities: payments by UK residents etc
F31
This section applies if—
a
a person pays a manufactured payment as mentioned in section 614ZC(1),
b
the amount payable is representative of interest on UK securities (“manufactured interest”), and
c
the person —
i
is UK resident, or
ii
pays the manufactured interest in the course of a trade carried on in the United Kingdom through a branch or agency.
F51A
But this section does not apply if—
a
the manufactured interest is paid by a UK resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and
b
section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.
2
The payer of the manufactured interest must, on making the payment, deduct from the gross amount of the manufactured interest a sum representing income tax on it at the F1basic rate in force for the tax year in which the payment is made.
3
The “gross amount” of manufactured interest is equal to the gross amount of the interest of which it is representative.
4
5
For provision about the collection of income tax in respect of a payment from which a sum must be deducted under this section—
a
see Chapter 15 if the payer of the manufactured interest is a company, and
b
otherwise see Chapter 16.
F46
In subsection (1) “UK securities” means securities of—
a
the government of the United Kingdom,
b
a local authority in the United Kingdom,
c
another public authority in the United Kingdom, or
d
a UK resident company or other UK resident body.
7
But “UK securities” does not include shares in a UK resident company.
8
In this section “securities” includes loan stock or any similar security.
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)