Income and Corporation Taxes Act 1988

326B Loss of exemption for special savings accounts.U.K.

(1)A tax-exempt special savings account shall cease to be such an account if at any time after it is opened any of the conditions set out in subsections (4) to (8) of section 326A, or any further condition prescribed by regulations made by the Board, is not satisfied, or if any of the events mentioned in subsection (2) below occurs.

(2)The events referred to in subsection (1) above are—

(a)the deposit of more than £3,000 in the account during the period of 12 months beginning with the day on which it is opened, more than £1,800 in any of the succeeding periods of 12 months, or more than £9,000 in total;

(b)a withdrawal from the account which causes the balance to fall below an amount equal to the aggregate of—

(i)all the sums deposited in the account before the time of the withdrawal, and

(ii)an amount equal to income tax at the basic rate on any interest or bonus paid on the account before that time (and for this purpose the basic rate in relation to any interest or bonus is the rate that was the basic rate when the interest or bonus was paid);

(c)the assignment of any rights of the account-holder in respect of the account, or the use of such rights as security for a loan.

(3)If at any time an account ceases to be a tax-exempt special savings account by virtue of subsection (1) above, the Income Tax Acts shall have effect as if immediately after that time the society or institution had credited to the account an amount of interest equal to the aggregate of any interest and bonus payable in respect of the period during which the account was a tax-exempt special savings account.

Modifications etc. (not altering text)