Part 6 U.K. Exempt income

Chapter 9 U.K. Other income

Interest only income U.K.

755 Interest on foreign currency securities etc. owned by non-UK residents U.K.

(1) This section applies to interest on—

(a) such foreign currency securities issued by a local authority or a statutory corporation as the Treasury direct, and

(b) such foreign currency loans made to a statutory corporation as the Treasury direct.

(2) No liability to income tax arises in respect of interest to which this section applies if—

(a) in the case of interest on a security, its beneficial owner is a non-UK resident, and

(b) in the case of interest on a loan, the person for the time being entitled to repayment or eventual repayment is a non-UK resident.

(3) But interest is not exempt under subsection (2) because a person is a non-UK resident if it is treated as another person's income under—

• Chapter 5 of Part 5 (settlements: amounts treated as income of settlor), or

• [F1 Chapter 2 of Part 13 of ITA 2007](anti-avoidance provisions: transfer of assets abroad).

(4) In this section—

• “company” means a company, as defined in section 735(1)(a) of the Companies Act 1985 (c. 6) or Article 3(1)(a) of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)),

• “foreign currency”, in relation to loans and securities, has the meaning given by section 756, and

• “statutory corporation” means—

  (a)

  a corporation incorporated by an Act (other than a company), or

  (b)

  any other corporation on which functions connected with carrying on an undertaking are conferred by an Act or by an order made under or confirmed by an Act.

Textual Amendments

F1 Words in s. 755(3) substituted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 574 (with transitional provisions and savings in Sch. 2)