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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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A "Qualifying Time Deposit" is a deposit of at least £50,000

Customer Question

A "Qualifying Time Deposit" is a deposit of at least £50,000 which requires repayment at a specified time "within" 5 years of the QTD being made. The relevance of the definition is that interest payable on it may be paid gross rather than net of standard rate tax. So it seems to me that a deposit made on 1 April 2012 which is repayable on 31 March 2017 is required to be repaid "within" 5 years. I do not see that it would have to be repayable before 31 March 2017 to be repayable within 5 years. Do you agree?

Exact periods are important for construction of limitations e.g. on bringing actions and I would have thought the same applied to taxation matters.

Thank you for your consideration of this rather narrow point.
Submitted: 4 years ago.
Category: Tax
Expert:  TaxRobin replied 4 years ago.
Hello and thank you for using Just Answer,
The definition is et in S866
An account is a Qualifying Time Deposit (QTD) if the terms & conditions for the account
meet the five criteria below :
the deposit is at least £50,000
repayment to be made at a specified time within 5 years of the QTD being made
makes no provision for the right to repayment to be transferred
prevents partial withdrawals
prevents additions.
Criteria 2 – repayment within 5 years
The terms & conditions must specify the repayment date. This date must be within 5 years of the QTD being made – repayment on the fifth anniversary is not acceptable.
The repayment date must be specified at the outset - it is not sufficient that the deposit
agreement says merely ‘x days from the date notice to withdraw is given’, it must give the actual date.
If a QTD matures on a non working day it can be repaid on the next working day or it can be repaid on the last working day prior to maturity.
You may find the following link beneficial:
http://hmrc.gov.uk/taxon/guidance-notes.pdf