# Income Tax Act 2007, Section 886: Interest paid by recognised clearing houses etc

Extent: E+W+S+N.I.

(1) The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest made by a relevant entity if—
(a) the relevant entity is carrying on business as the provider of a central counterparty clearing service or 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 or 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), 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 a relevant entity in respect of contracts made by it as the provider of a central counterparty clearing service or as a central securities depository .
(3) In this section—
“central counterparty clearing service” means the service provided by a 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
“relevant entity”, means any of the following (as defined for the purposes of FISMA 2000 by section 285 of that Act)—
(a)a recognised clearing house;
(b)a recognised investment exchange;
(c)...
(d)a third country central counterparty.
(e) a recognised CSD;
(f)...
(g)a third country CSD.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Source: https://www.legislation.gov.uk/ukpga/2007/3/section/886 (the official version)
Page: https://openlegislation.uk/income-tax-act-2007/section-886
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.