Section 505 Deposit arrangements

(1)

This section applies to arrangements if under them—

(a)

a person (“the depositor”) deposits money with a financial institution,

(b)

the money, together with money deposited with the institution by other persons, is used by it with a view to producing a profit,

(c)

from time to time the institution makes or credits a payment to the depositor out of profit resulting from the use of the money,

(d)

the payment is in proportion to the amount deposited by the depositor, and

(e)

the payments so made or credited by the institution equate, in substance, to the return on an investment of money at interest.

(2)

This section is subject to section 508 (provision not at arm's length: exclusion of arrangements from sections 503 and 504, this section, and sections 506 and 507).

Notes on Part 6

Modifications

C1: Pt. 6 modified (for the tax year 2026-27 and subsequent tax years (but in relation to investment management services whenever performed)) by 2005 c. 5, Sch. A1 para. 35(7) (as inserted by Finance Act 2026 (c. 11), s. 58(6), Sch. 11 para. 1)