Income Tax Act 2007

134 (1) Amend section 582 (funding bonds issued in respect of interest on certain debts) as follows.

(2) In subsection (1)(b) omit the words from “or section” to “income tax purposes)”.

(3) For subsections (2) and (2A) substitute—

“(2) Subsection (2A) applies if an issue of funding bonds is treated as a payment of interest as mentioned in subsection (1)(a) and—

(a) the person by or through whom the bonds are issued is required to retain bonds under section 939(2) of ITA 2007, but

(b) it is impracticable for the person to do so.

(2A) In that case, tax in respect of the amount of interest treated by virtue of subsection (1)(a) as having been paid by the issue of the bonds shall be charged under Case VI of Schedule D for the chargeable period in which the bonds are issued on the persons receiving or entitled to the bonds.”