Section 697 | Exceptions to section 696

(1)Section 696 does not apply if A—

(a)is a bank, building society, financial trader , recognised clearing house, recognised CSD... or third country central counterparty,^F1F2F3

(b)is a party to the derivative contract solely for the purposes of a trade or part of a trade it carries on in the United Kingdom, and

(c)is a party to it otherwise than as agent or nominee of another person.

(2)Section 696 does not apply if NR—^F4

(a)is chargeable to corporation tax or income tax in respect of income arising from the derivative contract (or would be if there were any such income), and^F4

(b)is a party to the derivative contract otherwise than as agent or nominee of another person.^F4

(3)Section 696 does not apply if arrangements made in relation to the territory in which NR is resident—

(a)have effect under section 2(1) of TIOPA 2010 (double taxation relief), and^F5

(b)make provision in relation to interest (as defined in the arrangements).

(4)It does not matter whether the provision mentioned in subsection (3)(b) is for relief or otherwise.

(5)If NR is a party to the contract as agent or nominee of another person, subsection (3) applies as if the reference to the territory in which NR is resident were a reference to the territory in which that other person is resident.

(6)In this section—^F6F7F8F9F10

“recognised clearing house”, “recognised CSD”... and “third country central counterparty” have the meanings given by section 285 of FISMA 2000 (exemptions for recognised bodies).