Income Tax Act 2007 section 866

Deduction by deposit-takers: qualifying time deposits

Section 866 (via Schedule 2, paragraph 158) sets out the transitional rules under which certain older deposits held with deposit-takers are treated as qualifying time deposits for the purposes of income tax deduction at source.

• The provision applies only to deposits made with a deposit-taker before 6 July 1984 that meet specific conditions regarding their terms.
• The deposit terms must not allow the right to repayment to be transferred, and must prevent both partial withdrawals from and additions to the deposit.
• The deposit-taker must be required either to repay the sum at the end of a specified period ending after 5 April 1985, or — where interest is payable only on repayment — to repay the sum on demand or on notice.
• A deposit meeting all of these conditions is treated as a qualifying time deposit for the purposes of the income tax deduction at source rules in section 866.