38 Certain State-guaranteed securities

(1) & (2) The favourable treatment of interest outlined in section 36 (that is, that interest on certain securities may be issued without deduction of tax at source) applies to any interest on securities issued by a body corporate in respect of which the payment of interest and the repayment of principal is guaranteed by a Minister of the Government under statutory authority. The interest, however, is then chargeable under Case III of Schedule D unless otherwise specifically exempted. (The Case III of Schedule D charge is removed in certain cases – see section 49.) The securities issued by certain semi-State bodies which are covered by sections 37 are excluded from this section as are securities issued by a company formed by the National Development Finance Agency.

(3) Such interest paid on such securities is allowable as a deduction in computing the Case I Schedule D profits or gains of the body corporate concerned.

Relevant Date: Finance Act 2019