Part 15U.K.Deduction of income tax at source

Modifications etc. (not altering text)

Chapter 3U.K.Deduction from certain payments of yearly interest

Exceptions from duty to deductU.K.

886Interest paid by recognised clearing houses etcU.K.

(1)The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest made by a [F1relevant entity] if—

(a)the [F2relevant entity] is carrying on business as the provider of a central counterparty clearing service [F3or as a central securities depository], and

(b)the interest is paid in the ordinary course of that business, on margin or other collateral deposited with it by users of the service [F4or as a central securities depository].

(2)The duty to deduct a sum representing income tax under section 874 does not apply to interest treated by virtue of section 607 (treatment of price differences under repos)[F5, or paragraph 5 of Schedule 13 to FA 2007 (relief for borrower for finance charges in case of debtor repos and debtor quasi-repos),] as paid by [F6a relevant entity] in respect of contracts made by it as the provider of a central counterparty clearing service [F7or as a central securities depository] .

(3)In this section—

  • “central counterparty clearing service” means the service provided by [F8a relevant entity] to the parties to a transaction where there are contracts between each of the parties and [F8the relevant entity] (in place of, or as an alternative to, a contract directly between the parties), and

  • [F9“relevant entity”, means any of the following (as defined for the purposes of FISMA 2000 by section 285 of that Act)—

    (a)

    a recognised clearing house;

    (b)

    a recognised investment exchange;

    (c)

    F10...

    (d)

    a third country central counterparty.

    (e)

    [F11a recognised CSD;

    (f)

    F10...

    (g)

    a third country CSD.]]

  • F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F5Words in s. 886(2) inserted (with effect in accordance with art. 3 of the commencing S.I.) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 24; S.I. 2007/2483, art. 3

F10Words in s. 886(3) omitted (31.12.2020) by virtue of The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), regs. 1(3), 4 (with reg. 39) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 43(l)); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)