Section 261B Taxation of specified interest

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Amendments

Section 261B inserted by Finance Act 2007 section 34(1)(c) from 2 April 2007.

(1) In this section "specified interest" means interest arising to a person in respect of a deposit in relation to which a declaration has been made by the person under subsection (1A) or (1B) of section 256 and which is not included in relevant interest for the purposes of paragraph (c)(i)(II) of section 261.

What is "specified interest"?

(1) Specified interest is interest which is not subject to DIRT because:...

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(2) Notwithstanding section 15, where the taxable income of that person includes specified interest, the part of taxable income, equal to that specified interest, shall be chargeable to tax at the rate at which tax would have been deducted, from that interest, if a declaration under subsection (1A) or (1B) of section 256 had not been made.

Amendments

Subs (2) substituted by Finance (No. 2) Act 2008 section 26(1)(c) for 2009 and later tax years.

How is my taxable income affected by specified interest?

(2) For any particular tax year, the part of your taxable income which is chargeable at the standard rate is to be increased by the amount of your specified interest. This ensures that if you have made a declaration, you cannot be taxed at a rate hig...

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(3) Section 246(2) does not apply to a payment of specified interest if it would otherwise apply.

Is DIRT deductible from my specified interest as a company or non-resident?

(3) In general, interest paid by a company or to a non-resident is subject to withholding tax at the standard rate (section 246). This rule does not apply as regards specified interest (see (1)).