SolvedSAIM9140 | Deduction of tax: payments other than interest and annual payments
From HM Revenue & Customs · Savings and Investment Manual
Deduction of tax
The rules in ITA07/PT15 on deduction of tax at source also apply to payments other than bank and building society interest, and yearly interest and annual payments. These include the following.
Building society securities
Deduction of tax at the basic rate may be required in respect of certain building society shares or securities which are listed or capable of being listed on a recognised stock exchange (ITA07/S889). Permanent Interest Bearing Shares will be exempt in practice because they normally satisfy the Quoted Eurobond exemption in ITA07/S987.
UK public revenue dividends
Public revenue dividends include income from securities paid out of UK government revenue, but exclude interest on local authority stock. Chapter 5 (ITA07/S890 to S897) requires deduction of tax unless they are ‘gross paying securities’, which refers to gilt-edged securities (as defined in ITA07/S1024 to mean those listed in TCGA92/SCH9), or other securities which are the subject of a Treasury direction.
Other deduction of tax rules
Other rules on deduction of tax are set out in Part 15. These are explained elsewhere in SAIM or in other guidance.
‘manufactured payments’ - Chapter 9 (CFM74300)
non-commercial payments made by companies - Chapter 10
inter-company payments - Chapter 11 (CTM35200 onwards)
funding bonds - Chapter 12 (SAIM2200)
unauthorised unit trusts - Chapter 13 (SAIM6050)
payments that are subject to tax avoidance directions - Chapter 14