C1Part 15Deduction of income tax at source
Chapter 3Deduction from certain payments of yearly interest
Exceptions from duty to deduct
886Interest paid by recognised clearing houses etc
1
The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest made by a F2relevant entity if—
a
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 F11or 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)F1, 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 F4a relevant entity in respect of contracts made by it as the provider of a central counterparty clearing service F8or as a central securities depository .
3
In this section—
“central counterparty clearing service” means the service provided by F5a relevant entity to the parties to a transaction where there are contracts between each of the parties and F5the relevant entity (in place of, or as an alternative to, a contract directly between the parties), and
F7“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
an EEA central counterparty;
- d
a third country central counterparty.
- e
F10a recognised CSD;
- f
an EEA CSD;
- g
a third country CSD.
- a
F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. 15 modified (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 551(4), 1329(1) (with Pts. 1, 2, Sch. 2 para. 78)