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(1)This section applies if a person who pays manufactured interest as mentioned in section 578(1)—
(a)is non-UK resident, and
(b)pays the manufactured interest otherwise than in the course of a trade carried on in the United Kingdom through a branch or agency.
(2)The recipient must account for and pay income tax in respect of the manufactured interest if the recipient—
(a)is UK resident, or
(b)is non-UK resident but receives the manufactured interest for the purposes of a trade carried on by the recipient in the United Kingdom through a branch or agency.
(3)The amount of income tax to be accounted for and paid is equal to the amount of the sum representing income tax which the payer would have been required to deduct under section 919(2) if the payer had been UK resident.
(4)If the payer would not have been required to deduct any sum under section 919(2), the recipient is not required to account for and pay any income tax under this section.
(5)For examples of cases in which subsection (4) applies see (in particular)—
section 921 (cases where interest on underlying securities paid gross), and
Chapter 11 (payments between companies etc: exception from duties to deduct).
(6)This section is subject to—
section 583 (manufactured payments exceeding underlying payments), and
section 585 (manufactured payments: power to deal with special cases).
(7)Provision about the collection of income tax required to be accounted for and paid under this section may be included in regulations under section 586.