Income Tax Act 2007 section 981

Foreign currency securities etc: exception from duties to deduct

Section 981 provides an exemption from the normal duty to deduct income tax at source when paying interest on foreign currency securities and similar instruments owned by non-UK residents.

• Interest paid on foreign currency securities owned by non-UK residents is exempt from the usual withholding tax obligations
• This overrides the general duties to deduct income tax at source contained elsewhere in Part 15 of the Act
• The exemption applies specifically to interest payments falling within section 755(1) of ITTOIA 2005
• The effect is that such interest can be paid gross, without any deduction for income tax