Chapter 6 Section 352 certificates
6.1 The Section 352 certificate
6.2 What the certificate must show
6.3 Joint accounts
6.4 Duplicate certificates
6.5 Adjustments to interest details
6.6 Retrospection
6.7 Foreign currency accounts
6.8 Charging for certificates
6.9 Death of investor
6.10 TESSAs
6.11 ISAs
6.12 Repaired and void ISAs
6.13 Security
6.1The Section 352 certificate
Investors may ask deposit-takers for a statement of LRT deducted from their interest. Where an investor makes a written request a statement must be provided by the deposit-taker. The deposit-taker cannot make a charge for the original statement but may for duplicates (see paragraph 6.8). The Inland Revenue no longer routinely requires individuals to submit Section 352 certificates with their tax repayment claims and it is up to the deposit-taker whether they issue Section 352 certificates automatically to all of their customers, or on a request basis only.
6.2 What the statement must show
The statement must show
relating to the particular interest payment(s) (or series of interest payments within a tax year) for which the investor requested the statement. And it should state that it is a certificate given under Section 352 Income and Corporation Taxes Act 1988.
It is not necessary for Section 352 certificates to include the signature of the deposit-taker's representative but the Inland Revenue recommends that a signature is shown. Facsimile signatures are acceptable. Deposit-takers may issue computer generated certificates provided that they are printed on systems generated headed paper and not blank computer paper.
A specimen certificate which deposit-takers may wish to adopt is reproduced at Appendix 4.
Investors are likely to want Section 352 certificates as evidence that they have paid income tax by deduction under the Scheme, when they claim repayment of income tax from the Inland Revenue. Certificate(s) should not include any interest shown on a previous Section 352 certificate, whether or not the previous certificate relates to an earlier tax year, because this could result in duplicate repayments of income tax.
Where there is a joint account only one Section 352 certificate should be issued, even where more than one account holder requests a certificate. This certificate should show details of LRT and interest for the whole account.
Where part of the interest has been paid without deducting LRT, and part after deducting LRT, deposit-takers should, whenever possible, indicate which account holder(s) has (have) registered for payment of interest without deduction of LRT. This will help investors complete their tax return.
Where an investor has lost his or her certificate a duplicate Section 352 certificate may be issued but must be clearly marked 'duplicate' (see paragraph 6.8 regarding charging).
6.5 Adjustments to interest details
Where a Section 352 certificate has already been issued showing details of interest payment(s) and either the interest paid or the LRT deducted, is for whatever reason adjusted deposit-takers must not issue further Section 352 certificates showing the adjusted interest payment(s) or LRT. Deposit-takers should instead issue a letter of explanation to the investor showing the adjusted details. Where an additional payment of interest is made because too little interest has previously been paid, a Section 352 certificate may be issued showing that payment as a separate payment of interest in the tax year in which it is paid. This may, of course, be later tax year than the one in which the original interest was paid.
If an investor registers for interest without the deduction of tax part way through a tax year, and a Section 352 certificate has been issued for that account before the investor registered, the tax deducted cannot be refunded under the retrospection provisions (see paragraph 3.23) The investor must claim a repayment from the Inland Revenue. This ensures that the investor does not receive a refund under the retrospection provisions and a repayment from the Inland Revenue by making a claim with the Section 352 certificate.
Where the account is a foreign currency account the Section 352 certificate can be shown in the foreign currency. There is no requirement to show the currency in sterling.
Deposit-takers may charge for providing duplicate Section 352 certificates, but not for originals.
Section 352 certificates may be requested for the period up to, and the period from, the date of death of a deceased investor. The certificate up to the date of death should show the name of the deceased investor, details of interest payments and LRT deducted from the previous 6 April to the date of death, excluding any payments already shown on a previous certificate. The certificate should not show interest accrued, but not paid, up to the date of death. Where a deposit-taker's systems will not produce a Section 352 certificate for the period up to the date of death, the Section 352 certificate for the year of death should be supported by an analysis of interest paid, and LRT deducted up to, and from, the date of the investor's death.
The Section 352 certificate from the date of death may be in the name of the deceased or the personal representatives if they have taken control of the account. It should show details of interest payments and LRT deducted from the date of death to the date of closure of the account or the following 5 April, whichever is earlier.
The first interest payment after the date of death may include interest accrued up to the date of death. That payment should be shown on the Section 352 certificate relating to the period from the date of death and deposit-takers should not apportion the interest in any way.
Interest on TESSAs is exempt from income tax and is outside the Scheme. But when a TESSA ceases prematurely interest paid is not exempt from income tax. The normal rules of the Scheme apply. The interest paid on the TESSA before cessation is treated as if it was credited to the account immediately after cessation. If the investor does not expect to be liable to income tax or is NOR in the UK they can arrange to receive gross interest (see Chapters 3 and 4 respectively).
A Section 352 certificate may be issued for the year in which a TESSA ceases prematurely to show all interest paid or treated as paid to the account, the amount of LRT deducted and the amount actually paid to the investor.
Where a TESSA is discovered to be invalid deposit-takers should deduct LRT in the normal way. Section 352 certificates may be issued for each year.
Interest on an ISA account is exempt from income tax and is outside the Scheme (see paragraph 2.17). Deposit-takers should not normally issue Section 352 certificates in respect of interest paid on an ISA account.
However, interest paid in respect of ISA subscriptions that are
A Section 352 certificate may be issued for interest paid inside an ISA which has been voided. Where the ISA has been repaired the certificate may be issued for interest paid inside the ISA before the date of repair.
Investors may use Section 352 certificates to claim repayment of LRT from the Inland Revenue. Section 352 certificates are therefore valuable documents and deposit-takers should ensure that blank certificates are held securely.
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