Commentary on Sections Overview Overview Section 856: Investments which are relevant investments
2591.This section sets out the main rules about which investments are relevant investments. It is based on section 481(4) of ICTA and parts of regulations 3 and 4 of the building society regulations. See Change 127 in Annex 1, and the overview commentary on this Chapter, for the effects of the alignment of the regimes.
2592.Subsection (1) sets out the four categories of investments which are relevant investments for the purposes of this Chapter. Subsection (2) makes clear that subsection (1) is subject to the general rules in sections 858 to 870 about when an investment will not be treated as a relevant investment.
2593.Subsections (3) to (6) set out the detail of the conditions governing the four categories of relevant deposits.
2594.With the exception of the personal representative category, each category is separate and does not overlap. Consequently, an investment will only be a relevant investment where all the persons entitled to the interest payment are either:
	individuals (subsection (3)),
	a Scottish partnership where all the partners are individuals (subsection (4)), or
	trustees of a discretionary or accumulation settlement (subsection (6)).
2595.Where a personal representative (subsection (5)) is entitled to any interest on the investment, the whole investment will be a relevant investment. So, where a personal representative is entitled to part of the interest on a joint account, all interest will be subject to deduction, unless a declaration has been made in accordance with the regulations made under section 852 in respect of the part of the investment which does not vest in the personal representative.
2596.Section 481(4)(c) of ICTA refers to a person receiving interest “as a personal representative [and] in his capacity as such.” As there is no distinction between a person receiving interest as a personal representative, and doing so in his capacity as such, the section simply refers to receiving interest “in that capacity”. This is in line with the approach used in relation to trustees.
2597.As a result of aligning the gross payment category rules for building societies with the deposit-taker rules and defining relevant investment by reference to the beneficial owner of the payment, many of the gross payment categories in regulation 4 of the building society regulations do not need to be rewritten. This is because certain of those payments do not fall within any category of relevant investment in the first place. See Changes 127 and 128 in Annex 1.