Income Tax (Trading and Other Income) Act 2005 section 370

Income charged

Section 370 establishes how much interest is subject to income tax and confirms that the full amount arising in the tax year is chargeable.

• Tax is charged on the full amount of interest arising in the tax year — no deductions are permitted against this income.
• The word "arising" has a broad legal meaning: it includes interest received, interest credited to a bank account, and any increase in a person's assets even where they have no immediate access to the funds.
• Costs such as collection expenses or losses on discounts cannot be set off against the interest charged.
• Special rules in Part 8 of the Act may modify the charge where the interest comes from a foreign source.