Section 878 | Interest paid by banks

(1)The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest made by a bank if that payment is made in the ordinary course of its business.

(1A)But that duty does apply to such a payment if it is treated as a payment of yearly interest by virtue of section 874(5A).^F1

(2)Section 991 (meaning of “bank”) applies for the purposes of this section.