Income Tax (Trading and Other Income) Act 2005

755 Interest 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

• Chapter 3 of Part 17 of ICTA (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.