CTM48610 - Authorised investment funds (AIFs): gross payment of interest distributions: automatic entitlement
Exceptions to obligation to deduct tax - sections 349A and 349B ICTA88
The obligation to deduct tax on making interest distributions is imposed by ICTA88/S349 (2). Where the obligation applies tax is deducted at the lower rate of IT from distributions made (ICTA88/S4 (1A)). However, a number of exceptions are provided by Sections 349A - B. Broadly the conditions that satisfy an exception (as at 1 April 2006) are:
- That the payment is made to, or to the nominee of:
-
- a local authority or a health service body,
- a public office or department of the Crown,
- a charity,
- a body that is allowed the same exemption from tax as a charity, the whole income of which is applicable to charitable purposes,
- a scientific research organisation,
- an exempt approved superannuation scheme and former approved superannuation funds,
- those other pension and retirement annuity trust schemes which are listed at ICTA88/S349B (3).
- The person to whom the payment is made is, or is the nominee of, the plan manager of a personal equity plan or individual savings account.
- The person to whom the payment is made is a society or institution with whom tax-exempt special savings accounts may be held and the payment is received in respect of investments held for the purposes of such accounts.
- Beneficial entitlement to the income in respect of which the payment lies with a partnership, each member of which is a person or body mentioned in (1) above.
