(1)Subject to the provisions of section 326B, any interest or bonus payable on a deposit account in respect of a period when it is a tax-exempt special savings account shall not be regarded as income for any income tax purpose.
(2)An account is a “tax-exempt special savings account” for the purposes of this section if the conditions set out in subsections (3) to (9) below and any further conditions prescribed by regulations made by the Board are satisfied when the account is opened; and subject to section 326B it shall continue to be such an account until the end of the period of five years beginning with the day on which it is opened, or until the death of the account-holder if that happens earlier.
(3)The account must be opened on or after 1st January 1991 by an individual aged 18 or more.
(4)The account must be with a building society or an institution authorised under the Banking Act 1987.
(5)The account must be identified as a tax-exempt special savings account and the account-holder must not simultaneously hold any other such account (with the same or any other society or institution).
(6)The account must not be a joint account.
(7)The account must not be held on behalf of a person other than the account-holder.
(8)The account must not be connected with any other account held by the account-holder or any other person; and for this purpose an account is connected with another if—
(a)either was opened with reference to the other, or with a view to enabling the other to be opened on particular terms, or with a view to facilitating the opening of the other on particular terms, and
(b)the terms on which either was opened would have been significantly less favourable to the holder if the other had not been opened.
(9)There must not be in force a notice given by the Board to the society or institution prohibiting it from operating new tax-exempt special savings accounts.]
Textual Amendments
F1Ss. 326A-326C inserted by Finance Act 1990 (c. 29), s. 28(1)