697Exceptions to section 696U.K.
(1)Section 696 does not apply if A—
(a)is a bank, building society, financial trader or recognised clearing house,
(b)is a party to the derivative contract solely for the purposes of a trade or part of a trade it carries on in the United Kingdom, and
(c)is a party to it otherwise than as agent or nominee of another person.
(2)Section 696 does not apply if NR—
(a)is a party to the derivative contract solely for the purposes of a trade or part of a trade which NR carries on in the United Kingdom through a relevant entity, and
(b)is a party to it otherwise than as agent or nominee of another person.
(3)Section 696 does not apply if arrangements made in relation to the territory in which NR is resident—
(a)have effect [F1under section 2(1) of TIOPA 2010] (double taxation relief), and
(b)make provision in relation to interest (as defined in the arrangements).
(4)It does not matter whether the provision mentioned in subsection (3)(b) is for relief or otherwise.
(5)If NR is a party to the contract as agent or nominee of another person, subsection (3) applies as if the reference to the territory in which NR is resident were a reference to the territory in which that other person is resident.
(6)In this section—
“recognised clearing house” has the meaning given by section 285 of FISMA 2000 (exemption for recognised investment exchanges and clearing houses), and
“relevant entity” means—
(a)if NR is a company, a permanent establishment, and
(b)if that is not the case, a branch or agency.
Textual Amendments
F1Words in s. 697(3)(a) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 93 (with Sch. 9 paras. 1-9, 22)