Taxes Consolidation Act 1997 section 814

Taxation of income deemed to arise from transactions in certificates of deposit and assignable deposits

Section 814 ensures that gains arising on the disposal of certificates of deposit and assignable deposits are subject to income tax under Schedule D Case IV, preventing the conversion of taxable interest into tax-free capital receipts.

• A certificate of deposit is a transferable document entitling the bearer to repayment of a deposited sum, with or without interest; an assignable deposit is a deposit of money that the depositor may assign to another person.
• Any gain on the disposal or exercise of a right arising from a certificate of deposit or assignable deposit is chargeable to income tax under Schedule D Case IV, unless already taxed as a trading receipt.
• Where the right was acquired on or before 3 April 1974, only the portion of the gain referable to the period after that date is chargeable.
• A loss on disposal may be set off or carried forward against taxable interest from the certificate of deposit or assignable deposit concerned.