(1)This section applies if—
(a)a FOTRA security is held on trust, and
(b)apart from this section, interest payable on the security would not be exempt from income tax under section 714 because of the security not being in the beneficial ownership of a person not ordinarily UK resident.
(2)For the purposes of determining whether the interest is exempt under section 714 it is to be assumed that the security is in the beneficial ownership of a person not ordinarily UK resident if none of the beneficiaries of the trust is ordinarily UK resident at the time when the interest arises.
(3)In subsection (2) “beneficiaries of the trust” includes any person known to the trustees as a person—
(a)who is, or will or may become, entitled under the terms of the trust to receive income under the trust, or
(b)to whom or for whose benefit such income may be paid or applied.
(4)In subsection (3) “income under the trust” includes any property held on the terms of the trust and falling to be treated as capital so far as it is or represents amounts received by the trustees as income.