Income Tax Act 2007 sections 165–166

Deduction from certain UK public revenue dividends

Sections 165 and 166 provide transitional rules preserving the tax treatment of gilt-edged securities that were subject to income tax deduction at source arrangements before 6 April 1998.

• Where a holder of gilts had both a Treasury direction and an application under the old ICTA rules before 6 April 1998, they are treated as having made a deduction at source application under section 895, effective from that date
• Gilt-edged securities issued before 6 April 1998 whose interest would have been paid after deduction of income tax, and which are registered under section 895 but had no prior ICTA direction, are also brought within the deduction at source regime
• For such securities, the "appropriate person" is deemed to have made a section 895 application effective from 6 April 1998
• The "appropriate person" is generally whoever held the securities immediately before 6 April 1998, or, where the securities were transferred before that date but after a dividend balance was struck for a payment due on or after that date, the person who held them when the balance was struck

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