Section 888A — Income Tax Act 2007: Qualifying private placements

Qualifying private placements 888A 1 The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest on a qualifying private placement. 2 “ Qualifying private placement ” means a security—

a which represents a loan relationship to which a company is a party as debtor, b which is not listed on a recognised stock exchange, and c in relation to which such other conditions as the Treasury may specify by regulations are met.

3 The conditions which may be specified under subsection (2)(c) include conditions relating to—

a the security itself, b the loan relationship represented by the security, c the terms on which, or circumstances under which, the security or loan relationship is entered into, d the company which is party to the loan relationship as debtor, e any person by or through whom a payment of interest on the security is made, or f the holder of the security.

4 Regulations under this section may make provision about the consequences of failing to make a deduction under section 874, in respect of a payment of interest on a security, in cases where the person required to make the deduction had a reasonable, but mistaken, belief that the security was a qualifying private placement.

5 Regulations under this section may—

a make different provision for different cases;

b contain incidental, supplemental, consequential and transitional provision and savings.

6 In this section “ loan relationship ” has the same meaning as in Part 5 of CTA 2009.