Part 6Exempt income

Chapter 9Other income

Interest only income

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

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

  • F1Chapter 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 F41(1) of the Companies Act F32006 (c. 46)F2...,

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

  • “statutory corporation” means—

    1. a

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

    2. 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.