The Friendly Societies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) (Amendment) Regulations 1997

Link to law: http://www.legislation.gov.uk/uksi/1997/475/made/data.htm?wrap=true
Published: 1997-02-25

Statutory Instruments
1997 No. 475

INCOME TAX
The Friendly Societies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) (Amendment) Regulations 1997

Made
25th February 1997

Laid before the House of Commons
26th February 1997

Coming into force
20th March 1997

The Treasury, in exercise of the powers conferred on them by section 51B(1) to (4) of the Income and Corporation Taxes Act 1988(1) and section 121 of the Finance Act 1993(2), hereby make the following Regulations:

Citation and commencement

1.  These Regulations may be cited as the Friendly Societies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) (Amendment) Regulations 1997 and shall come into force on 20th March 1997.

Interpretation

2.  In these Regulations “the principal Regulations” means the Friendly Societies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1996(3).

Amendments to the principal Regulations

3.  In regulation 7 of the principal Regulations (which inserts regulations 5A and 5B in the Friendly Societies (Provisional Repayments for Exempt Business) Regulations 1993(4) in relation to cases where payments of interest on relevant gilt-edged securities are made without deduction of tax to friendly societies carrying on exempt business as defined in the principal Regulations), the inserted regulation 5A shall be amended in accordance with regulation 4.

4.—(1) In paragraph (6) sub-paragraph (a) shall be omitted.

(2) In paragraph (8), in the substituted sub-paragraph (9)—

(a)in sub-paragraphs (i) and (ii) of paragraph (a), after the words “general annuity business” there shall be inserted the words “or tax exempt class IV business”;

(b)in sub-paragraphs (i) and (ii) of paragraph (b), for the words “long term business other than life or endowment business” there shall be substituted the words “tax exempt class IV business”;

(c)in paragraph (b)(iii), for the words “long term business other than life assurance business” there shall be substituted the words “tax exempt class IV business”.

(3) In paragraph (8), in the substituted sub-paragraph (9A)—

(a)in the definition of “tax exempt basic life assurance and general annuity business” for the words “regulation 5(2) of the Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1992”(5) there shall be substituted the words “regulation 6(2) of the Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997”(6);

(b)after that definition there shall be inserted the following definition—

““tax exempt class IV business” shall be construed in accordance with the definition inserted in section 431(2) by regulation 7(2) of those Regulations; and”;

(c)in the definition of “long term business”, for the words “regulation 5(4)” there shall be inserted the words “regulation 6(4)”;

(d)the definition of “life or endowment business” and the word “and” immediately preceding it shall be omitted.

(4) In paragraph (9) sub-paragraph (a) shall be omitted.

Patrick McLoughlin
Roger Knapman
Two of the Lords Commissioners of Her Majesty’s Treasury
25th February 1997

Explanatory Note

(This note is not part of the Regulations)
Schedule 19AB to the Income and Corporation Taxes Act 1988 (c. 1) (“Schedule 19AB” and “the Taxes Act” respectively) applies to an insurance company carrying on pension business; and makes provision for payments on account of tax borne by deduction and tax credits in respect of distributions received (“provisional repayments”). Schedule 19AB also makes provision determining how the amounts of provisional repayments are to be calculated.
Section 121 of the Finance Act 1993 empowers the Treasury to provide by regulations for Schedule 19AB to have effect in relation to the tax exempt business of a friendly society as it has effect in relation to the pension business of an insurance company; and the Friendly Societies (Provisional Repayments for Exempt Business) Regulations 1993 (S.I. 1993/3112, amended by S.I. 1997/474) (“the 1993 Regulations”) provide for Schedule 19AB to have such effect (subject to certain modifications and exceptions).
In relation to cases where payments of interest on relevant gilt-edged securities are made without deduction of tax to friendly societies carrying on tax exempt business further modifications of the 1993 Regulations were made by the Friendly Societies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1996 (S.I. 1996/21) (“the principal Regulations”).
These Regulations make a number of detailed amendments to the principal Regulations consequent upon the amendment, by section 171(1) of the Finance Act 1996 (c. 8), of the definition of “life or endowment business” in section 466(1) of the Taxes Act and the replacement of the Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1992 (S.I. 1992/1655) by the Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473).


(1)
1988 c. 1; section 51B was inserted by section 78(1) of the Finance Act 1995 (c. 4) and subsection (1) of section 51B was amended by paragraph 4 of Schedule 6 to the Finance Act 1996 (c. 8). By virtue of powers conferred on the Treasury under section 51B(3)(b) of the Income and Corporation Taxes Act 1988, the operation of Schedule 19AB to that Act was modified in relation to cases where payments of interest on relevant gilt-edged securities are made without deduction of tax to companies carrying on pension business by regulations 4 to 10 of S.I. 1995/3223.

(2)
1993 c. 34.

(3)
S.I. 1996/21.

(4)
S.I. 1993/3112, amended by S.I. 1997/474.

(5)
S.I. 1992/1655.

(6)
S.I. 1997/473.
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