Income and Corporation Taxes Act 1988

326 Interest etc. under contractual savings schemes. U.K.

M1 (1) Any terminal bonus, or interest or other sum, payable under a certified contractual savings scheme—

(a) in respect of money raised under section 12 of the M2 National Loans Act 1968, or

(b) in respect of shares in a building society, [F1 or

(c) in respect of money paid to [F2 a person falling within section 840A(1)(b)],][F3 or

(d) in respect of money paid to a relevant European institution,]

shall [F4 not be regarded as income for any income tax purpose.]

(2) In this section “certified contractual savings scheme” means, except in relation to a building society [F5 or [F2 a person falling within section 840A(1)(b)]][F6 or a relevant European institution], [F7 a share option linked scheme]—

(a) governed by regulations made under section [F8 11 of the M3 National Debt Act 1972]; and

(b) providing for periodical contributions by individuals for a specified period, and the repayment in accordance with the regulations of contributions together with any additional sum by way of bonus or interest, and

(c) certified by the Treasury as qualifying for exemption under this section.

(3) In this section “certified contractual savings scheme” means, in relation to a building society, [F7 a share option linked scheme]—

(a) providing for periodical contributions by individuals for a specified period, being contributions by way of investment in shares in the building society, and

(b) certified by the Treasury as [F9 fulfilling such requirements as the Treasury may specify for the purposes of this section], and as qualifying for exemption under this section.

[F10 (4) In this section “certified contractual savings scheme” means, in relation to [F2 a person falling within section 840A(1)(b)], [F7 a share option linked scheme]—

(a) providing for periodical contributions by individuals for a specific period, and

(b) certified by the Treasury as [F9 fulfilling such requirements as the Treasury may specify for the purposes of this section], and as qualifying for exemption under this section.]

[F11 (5) In this section “certified contractual savings scheme” means, in relation to a relevant European institution, a share option linked scheme—

(a) providing for periodical contributions by individuals for a specified period, and

(b) certified by the Treasury as [F9 fulfilling such requirements as the Treasury may specify for the purposes of this section], and as qualifying for exemption under this section.]

[F12 (6) Any terminal bonus, interest or other sum payable under a scheme shall not be treated as payable under a certified contractual savings scheme for the purposes of this section if—

(a) the contract under which the sum is payable provides for contributions to be made by way of investment in a building society or to be made to [F2 a person falling within section 840A(1)(b)] or to a relevant European institution, and

(b) neither the requirement under subsection (7) below nor that under subsection (8) below is fulfilled.

(7) The requirement under this subsection is that—

(a) when the contract is entered into there is Treasury authorisation for the society [F13 , person] or institution concerned to enter into contracts under the scheme, and

(b) the authorisation was given without any conditions being imposed.

(8) The requirement under this subsection is that—

(a) when the contract is entered into there is Treasury authorisation for the society [F13 , person] or institution concerned to enter into contracts under the scheme,

(b) the authorisation was given subject to conditions being met, and

(c) the conditions are met when the contract is entered into.]

[F14 (9) Schedule 15A to this Act (which contains provisions supplementing this section) shall have effect.]

Textual Amendments

F1 1990 s.29(a).

F2 Words in s. 326(1)(c)(2)(4)(6)(a) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 19(2)

F3 S. 326(1)(d) and preceding word inserted (with application in accordance with Sch. 12 para. 3(5) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 3(2)

F4 1990 s.29(b).Previously

“be disregarded for all purposes of the Income Tax Acts.”

F5 1990 s.29(c).

F6 Words in s. 326(2) inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 12 para. 3(3)

F7 Words in s. 326(2)(3)(4) substituted (with application in accordance with Sch. 12 para. 2(3) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 2(1)(2)

F8 1990 s.89and Sch.14 para.5 (correction of errors)—deemed always to have had effect. Previously

“12 of the National Debt Act 1958 or section 52 of the Finance Act 1969”.

F9 Words in s. 326(3)(b)(4)(b)(5)(b) substituted (with application in accordance with Sch. 12 para. 4(3) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 4(2); S.I. 1995/1778, art. 2

F10 1990 s.29(d).

F11 S. 326(5) inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 12 para. 3(4)

F12 S. 326(6)-(8) inserted (with application in accordance with Sch. 12 para. 5(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 5(1)

F13 Words in s. 326(7)(a)(8)(a) inserted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 19(3)

F14 S. 326(9) inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 12 para. 6(1)

Modifications etc. (not altering text)

C1 See 1988(F) Sch.12 para.7—application of s.326to building society transfers.

Marginal Citations

M1 Source-1970 s.415(1)-(3), (5)

M2 1968 c. 13.

M3 1972 c. 65.