Income Tax Act 2007 section 880

Interest paid on advances from building societies

Section 880 exempts interest paid on building society advances from the general requirement to deduct income tax at source.

• The general duty under section 874 requires income tax to be deducted from certain payments of yearly interest
• Section 880 provides a specific exception to this duty for interest paid on building society advances
• Where a borrower pays interest on a loan (advance) received from a building society, no tax deduction at source is required
• The building society receives the full interest payment without any income tax being withheld