Income and Corporation Taxes Act 1988

[F1 326A Tax-exempt special savings accounts. U.K.

(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 [F2 and before 6th April 1999] by an individual aged 18 or more.

(4) The account must be with a building society or [F3 a person falling within section 840A(1)(b)][F4 or a relevant European institution].

(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 [F5 , person] 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 [F5 , person] or institution prohibiting it from operating new tax-exempt special savings accounts.

[F6 [F7 (10) In this section “relevant European institution” means an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to accept deposits.]]]

Textual Amendments

F1 Ss. 326A-326C inserted by Finance Act 1990 (c. 29), s. 28(1)

F2 Words in s. 326A(3) inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 78

F3 Words in s. 326A(4) 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. 20(2)

F4 Words in s. 326A(4) inserted (with application in accordance with s. 63(5) of the amending Act) by Finance Act 1995 (c. 4), s. 63(2)

F5 Words in s. 326A(5)(9) 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. 20(3)(4)

F6 S. 326A(10) inserted (with application in accordance with s. 63(5) of the amending Act) by Finance Act 1995 (c. 4), s. 63(3)

F7 S. 326A(10) 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. 20(5)