Income Tax Act 2007 section 856

Investments which are relevant investments

Section 856 defines which investments qualify as "relevant investments" for the purpose of requiring deposit-takers to deduct income tax at source from interest payments.

• An investment is a relevant investment if all persons beneficially entitled to the interest are individuals, or if a Scottish partnership composed entirely of individuals is the sole beneficiary.
• An investment also qualifies where personal representatives are entitled to any interest and receive it in that capacity, or where trustees of a discretionary or accumulation settlement receive all the interest in that capacity.
• The personal representative condition is unique: if a personal representative is entitled to even part of the interest (for example, on a joint account), the entire investment is treated as a relevant investment and all interest is subject to deduction at source.
• Even if an investment meets one of the four qualifying conditions, it will not be a relevant investment if any of the exclusions in sections 863 to 870 apply — for example, where the deposit is held in a general client account or falls within another specified exemption.