A4.421 Deduction of tax from yearly interest—payment of 'yearly interest'
Tax must be deducted from payments of 'yearly interest' arising in the UK if they are made:
- Ìý
•ÌýÌýÌýÌý by a company
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•ÌýÌýÌýÌý by a local authority
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•ÌýÌýÌýÌý by or on behalf of a partnership of which a company is a member, or
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•ÌýÌýÌýÌý by any person to a person whose usual place of abode is outside the UK
There are many exceptions to this requirement. See A4.424 for details of the requirement to deduct tax and A4.425 for the exceptions.
The following commentary considers both the meaning of 'yearly interest' and what constitutes 'payment' in determining whether the requirement to deduct tax applies.
Meaning of interest
Two requirements need to be satisfied for a payment to amount to interest. First there has to be a sum of money by reference to which the payment, said to be interest, has to be ascertained. Secondly those sums have to be sums which are due to the
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