Income Tax Act 2007 section 863

General client account deposits

Section 863 explains when a deposit held in a general client account is excluded from being a "relevant investment" for income tax purposes, meaning the deposit-taker does not need to deduct income tax at source from the interest it earns.

• A general client account deposit is not treated as a relevant investment, so no tax needs to be deducted at source by the deposit-taker
• To qualify, the deposit must be held by a deposit-taker in a client account, and the account holder must be legally required to pass on interest to some or all of the clients whose money is in the account
• The exemption does not apply if the deposit-taker has identified the account as holding funds for one or more named or particular clients only
• The distinction turns on whether the account is a pooled general client account or a designated account for specific clients