Income Tax Act 2007 (c. 3)

Part 12 U.K. Accrued income profits

Chapter 3 U.K. Exemptions relating to interest on securities

680 Interest on securities involving accrued income losses: foreign trustees U.K.

(1) This section applies if—

(a) the trustees of a settlement are non-UK resident or domiciled outside the United Kingdom throughout a tax year in which an interest period or part of an interest period of securities falls,

(b) the trustees' income is or includes interest from those securities,

(c) the interest falls due at the end of that interest period, and

(d) had the trustees been UK resident, or domiciled in the United Kingdom, during a part of each such tax year the interest would have been wholly or partly exempt from income tax under section 679.

(2) No liability to income tax arises as a result of Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor) in respect of so much of the interest as would have been exempt from income tax under section 679.

(3) For cases where the interest period does not end with an interest payment day, see section 637 (accrued income losses treated as payments in next interest period).