Income Tax Act 2007 section 888C

Interest distributions of certain open-ended investment companies

Section 888C provides an exemption from the obligation to deduct income tax at source from interest distributions made by certain open-ended investment companies.

• Normally, payments of yearly interest are subject to a duty to deduct income tax at source before they are paid out.
• This section disapplies that duty for interest distributions made by certain open-ended investment companies.
• The exemption applies where the distributable amount is shown in the company's accounts as yearly interest and is treated as a payment of yearly interest.
• The effect is that these open-ended investment companies can pay out their interest distributions gross, without withholding tax.