Income Tax (Trading and Other Income) Act 2005 section 749

Repayment interest, and interest paid under repayment supplements

Section 749 exempts from income tax any interest that HMRC pays to taxpayers when making tax repayments or repayment supplements.

• Interest paid by HMRC on tax repayments is not subject to income tax.
• The exemption covers repayment supplements paid to individuals and others under the former ICTA rules.
• It also covers repayment supplements arising under the capital gains tax legislation.
• The exemption extends to repayment interest paid by HMRC under the Finance Act 2009 provisions.