Section 886 Interest paid by recognised clearing houses etcC1

United Kingdom

(1)

The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest made by a F1relevant entity if—

(a)

the F2relevant entity is carrying on business as the provider of a central counterparty clearing service F3or as a central securities depository, and

(b)

the interest is paid in the ordinary course of that business, on margin or other collateral deposited with it by users of the service F4or as a central securities depository.

(2)

The duty to deduct a sum representing income tax under section 874 does not apply to interest treated by virtue of section 607 (treatment of price differences under repos)F5, or paragraph 5 of Schedule 13 to FA 2007 (relief for borrower for finance charges in case of debtor repos and debtor quasi-repos), as paid by F6a relevant entity in respect of contracts made by it as the provider of a central counterparty clearing service F7or as a central securities depository .

(3)

In this section—

“central counterparty clearing service” means the service provided by F8a relevant entity to the parties to a transaction where there are contracts between each of the parties and the relevant entity (in place of, or as an alternative to, a contract directly between the parties), and
F9“relevant entity”, means any of the following (as defined for the purposes of FISMA 2000 by section 285 of that Act)—
1. (a)
  a recognised clearing house;
2. (b)
  a recognised investment exchange;
3. (c)
  F10...
4. (d)
  a third country central counterparty.
5. (e)
  F11a recognised CSD;
6. (f)
  ...
7. (g)
  a third country CSD.
F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations

Textual amendments

F1: Words in s. 886(1) substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 24(2)(a)(i) (with regs. 52-58)
F2: Words in s. 886(1)(a) substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 24(2)(a)(ii) (with regs. 52-58)
F3: Words in s. 886(1)(a) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), reg. 1, Sch. para. 12(a)(i) (with regs. 7(4), 9(1))
F4: Words in s. 886(1)(b) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), reg. 1, Sch. para. 12(a)(ii) (with regs. 7(4), 9(1))
F5: Words in s. 886(2) inserted (with effect in accordance with art. 3 of the commencing S.I.) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 24; S.I. 2007/2483, art. 3
F6: Words in s. 886(2) substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 24(2)(b) (with regs. 52-58)
F7: Words in s. 886(2) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), reg. 1, Sch. para. 12(b) (with regs. 7(4), 9(1))
F8: Words in s. 886(3) substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 24(2)(c)(i) (with regs. 52-58)
F9: Words in s. 886(3) inserted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 24(2)(c)(iii) (with regs. 52-58)
F10: Words in s. 886(3) omitted (31.12.2020) by virtue of The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), regs. 1(3), 4 (with reg. 39) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 43(l)); 2020 c. 1, Sch. 5 para. 1(1)
F11: Words in s. 886(3) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), reg. 1, Sch. para. 12(c) (with regs. 7(4), 9(1))
F12: Words in s. 886(3) omitted (1.4.2013) by virtue of The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 24(2)(c)(ii) (with regs. 52-58)

Modifications

C1: S. 886 modified (temp.) (31.12.2020) by The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), regs. 1(3), 39; 2020 c. 1, Sch. 5 para. 1(1)

Notes on Part 15

Modifications

C1: Pt. 15 modified (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 551(4), 1329(1) (with Pts. 1, 2, Sch. 2 para. 78)