Finance Act, 2001

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Amendment of Chapter 4 (interest payment by certain deposit takers) of Part 8 of Principal Act.

55.—Chapter 4 of Part 8 of the Principal Act is amended—

(a) in section 256(1)—

(i) by the substitution for the definition of “appropriate tax”—

(I) as on and from 6 April 2000, of the following:

“‘appropriate tax’, in relation to a payment of relevant interest, means a sum representing income tax on the amount of the payment—

(a) in the case of a relevant deposit or relevant deposits held in a special savings account, at the rate of 20 per cent,

(b) subject to paragraph (c), in the case of any other relevant deposit, at the standard rate in force at the time of payment, and

(c) in the case of a relevant deposit, being a deposit made on or after 23 March 2000, other than a relevant deposit—

(i) referred to in paragraph (a), or

(ii) the interest in respect of which is payable annually or at more frequent intervals, or

(iii) which is a specified deposit within the meaning of section 260,

at a rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent (within the meaning of section 4(1)) in force at the time of payment;”,

and

(II) as on and from 6 April 2001, of the following:

“‘appropriate tax’, in relation to a payment of relevant interest, means a sum representing income tax on the amount of the payment—

(a) in the case of interest paid in respect of a relevant deposit or relevant deposits held in a special savings account, at the rate of 20 per cent,

(b) subject to paragraph (c), in the case of interest paid in respect of any other relevant deposit, at the standard rate in force at the time of payment, and

(c) in the case of interest paid in respect of a relevant deposit, being a deposit made on or after 23 March 2000, other than interest which is—

(i) referred to in paragraph (a), or

(ii) payable annually or at more frequent intervals, or

(iii) specified interest within the meaning of section 260,

at a rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent (within the meaning of section 4(1)) in force at the time of payment;”,

(ii) by the substitution for the definition of “deposit”, as respects a deposit made on or after 6 April 2001, of the following:

“‘deposit’ means a sum of money paid to a relevant deposit taker on terms under which it, or any part of it, may be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made, notwithstanding that the amount to be repaid may be to any extent linked to or determined by changes in a stock exchange index or any other financial index;”,

(iii) by the substitution for the definition of “interest”, as respects a deposit made on or after 6 April 2001, of the following:

“‘interest’ means any interest of money whether yearly or otherwise, including any amount, whether or not described as interest, paid in consideration of the making of a deposit, and, as respects—

(a) a deposit, where the amount to be repaid may be to any extent linked to or determined by changes in a stock exchange index or any other financial index, includes any amount which is or is to be repaid over and above the amount of the deposit,

(b) a building society, includes any dividend or other distribution in respect of shares in the society,

but any amount consisting of an excess of the amount received on the redemption of any holding of A.C.C. Bonus Bonds — First Series, issued by ACC Bank plc, over the amount paid for the holding shall not be treated as interest for the purposes of this Chapter,”,

and

(iv) in the definition of “special savings account” by the substitution for “on or after the 1st day of January, 1993” of “on or after 1 January 1993 and before 6 April 2001”,

(b) in section 258(9)(c), as on and from 6 April 1997, by the substitution for “Subsections 2 and 4” of “Subsections 2 to 4”,

(c) in section 261(c)(i)(II) by the substitution for “paragraph (b) or the definition” of “paragraph (b) of the definition”, and

(d) in section 265(2)(e) by the substitution for “true and correct” of “true and correct; but in the case of a company no such certificate shall be required where the declarer includes a written statement, as part of the declaration to the relevant deposit taker, confirming that the company has availed of the exemption under Part III of the Companies (Amendment) (No. 2) Act, 1999 ”.