Section 919 — Income Tax Act 2007: Manufactured interest on UK securities: payments by UK residents etc

Manufactured interest on UK securities: payments by UK residents etc 919 1 This section applies if—

a a person pays a manufactured payment as mentioned in section 614ZC(1),

b the amount payable is representative of interest on UK securities (“manufactured interest”),

and c the person —

i is UK resident, or ii pays the manufactured interest in the course of a trade carried on in the United Kingdom through a branch or agency. 1A But this section does not apply if—

a the manufactured interest is paid by a UK resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and b section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.

2 The payer of the manufactured interest must, on making the payment, deduct from the gross amount of the manufactured interest a sum representing income tax on it at the savings basic rate in force for the tax year in which the payment is made.

3 The “gross amount” of manufactured interest is equal to the gross amount of the interest of which it is representative.

4 This section is subject (in particular) to— ... ... section 921 (cases where interest on underlying securities paid gross), and Chapter 11 (payments between companies etc: exception from duties to deduct).

5 For provision about the collection of income tax in respect of a payment from which a sum must be deducted under this section—

a see Chapter 15 if the payer of the manufactured interest is a company, and b otherwise see Chapter 16.

6 In subsection (1) “ UK securities ” means securities of—

a the government of the United Kingdom, b a local authority in the United Kingdom, c another public authority in the United Kingdom, or d a UK resident company or other UK resident body.

7 But “ UK securities ” does not include shares in a UK resident company.

8 In this section “ securities ” includes loan stock or any similar security.