Commentary

E1.563 Interest from tax reserve certificates

Personal and employment tax

E1.563 Interest from tax reserve certificates

E1.563 Interest from tax reserve certificates

The Treasury introduced tax reserve certificates in 1941 as a mechanism for making payments of tax on account. Interest is paid when the certificates are used to settle a tax liability. Although tax reserve certificates have not been issued since the mid 1970s when they were replaced by certificates of tax deposit, they are still used from time to time to settle tax liabilities. The interest paid on tax reserve certificates is exempt from income tax in respect of certificates redeemed before 6 April 2013 (1 April 2013 for corporation tax purposes)1.

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