7.8.1 The duty to deduct yearly interest

There is, in general, a duty to make interest payments under deduction of basic rate income tax. The duty to deduct withholding tax arises under ITA 2007, s. 874 and applies to payments of yearly interest arising in the UK. However, this is qualified by various exceptions, with the result that most UK landlords who take out a standard bank loan will not have to apply any withholding (see 7.8.2).

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