Income Tax (Trading and Other Income) Act 2005 section 774

Income from securities issued by designated international organisations

Section 774 provides an exemption from income tax for non-UK residents on income from securities issued by certain international organisations that have been designated by the Treasury.

• Non-UK residents are exempt from income tax on income (including dividends or interest) from securities issued by Treasury-designated international organisations, provided the tax liability only arises because the security was issued in the UK or in sterling, the income is paid in the UK or in sterling, or the organisation maintains a UK office or place of business.
• The three circumstances that can give rise to a UK tax liability — and which this exemption overrides — are: the security being issued in the UK or in sterling, the income being payable or paid in the UK or in sterling, and the issuing organisation maintaining an office or other place of business in the UK.
• The Treasury may designate the European Union, the European Investment Bank, or any international organisation that has the UK or the European Union as a member and whose founding agreement provides for a comparable tax exemption on income from its securities.
• For an international organisation other than the EU or the European Investment Bank to qualify for designation, two conditions must be met: the UK or the EU must be a member of that organisation, and the membership agreement must include a tax exemption for income from the organisation's securities equivalent to the one provided by this section.