919Manufactured interest on UK securities: payments by UK residents etc
(1)This section applies if a person who pays manufactured interest as mentioned in section 578(1)—
(a)is UK resident, or
(b)pays the manufactured interest in the course of a trade carried on in the United Kingdom through a branch or agency.
(2)The payer of the manufactured interest must, on making the payment, deduct from the gross amount of the manufactured interest a sum representing income tax on it at the savings rate in force for the tax year in which the payment is made.
(3)The “gross amount” of manufactured interest is equal to the gross amount of the interest of which it is representative.
(4)This section is subject (in particular) to—
section 583 (manufactured payments exceeding underlying payments),
section 585 (manufactured payments: power to deal with special cases),
section 921 (cases where interest on underlying securities paid gross), and
Chapter 11 (payments between companies etc: exception from duties to deduct).
(5)For provision about the collection of income tax in respect of a payment from which a sum must be deducted under this section—
(a)see Chapter 15 if the payer of the manufactured interest is a company, and
(b)otherwise see Chapter 16.