Information Exchange

BEFORE LOOKING AT the changes brought about by Finance Act 2000 and the subordinate regulations it may be as well to remind readers that for tax years up to 5 April 2001 banks building societies and certain other financial institutions have regularly made returns to the Inland Revenue under section 17 Taxes Management Act 1970 of the interest paid to their customers. Returns have also been made (under section 18) of interest received by such institutions from others for the account of their customers. The latter have been comparatively brief returns as purely passive receipts were excluded and even where the institution was involved in actively collecting such interest the paying and collecting agent rules applied in many cases.

In particular though for returns under section 17 institutions were allowed to exclude cases where the customer ...