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,

(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—

(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

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

(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

(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—

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