27Interest paid on deposits with banks etc.
(1)Any deposit-taker making a payment of interest in respect of any relevant deposit shall be liable to account for and pay an amount representing income tax on that payment, calculated by applying the composite rate (determined in accordance with section 26 of this Act) to the grossed-up amount of the payment, that is to say to the amount which after deduction of tax at the composite rate would be equal to the amount actually paid.
(2)Any payment of interest within subsection (1) above shall be treated as not being within section 54 of the Taxes Act (annual interest).
(3)Schedule 8 to this Act shall have effect for the purpose of supplementing this section.
(4)Subject to paragraph 6(1) of Schedule 8, this section applies in relation to payments made after 5th April 1985.