Commentary on Sections Overview Overview Section 889: Payments in respect of building society securities
2680.This section sets out the duty to deduct sums representing income tax from payments made in respect of certain building society shares or securities which are listed or capable of being listed on a recognised stock exchange. It is based on sections 4(1A) and (2) and 349(3A), (3B) and (4) of ICTA.
2681.Subsection (3) provides that qualifying certificates of deposit, qualifying uncertificated eligible debt security units and quoted Eurobonds are not subject to the duty to deduct under this Chapter.
2682.The references to qualifying deposit right in section 349(3A) and (4) of ICTA have not been rewritten as they are obsolete. See Change 133 in Annex 1.
2683.Subsection (4) provides the duty to deduct a sum representing income tax, and makes it explicit that the rate at which tax is to be deducted is the savings rate, that being the rate applicable to income within Chapter 2 of Part 4 of ITTOIA.
2684.Subsection (7) defines “dividend” as including any distribution and defines “security” as including a share, including in particular a “permanent interest bearing share” as defined in section 117 of TCGA.