Insurance Companies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1995
| Jurisdiction | UK Non-devolved |
| Citation | SI 1995/3223 |
| Year | 1995 |
1995 No. 3223
INCOME TAX
The Insurance Companies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1995
Made 11th December 1995
Laid before the House of Commons 11th December 1995
Coming into force 2nd January 1996
The Treasury, in exercise of the powers conferred on them by section 51B(1) to (4) of the Income and Corporation Taxes Act 19881hereby make the following Regulations:
Citation and commencement
1. These Regulations may be cited as the Insurance Companies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1995 and shall come into force on 2nd January 1996.
Interpretation
2. In these Regulations unless the context otherwise requires—
“amount of excess gilt interest received”, “amount of manufactured gilt interest paid”, “amount of manufactured gilt interest received” and “amount of real gilt interest received” have the same meanings as in the Gilts Regulations;
“the Gilts Regulations” means the Gilt-edged Securities (Periodic Accounting for Tax on Interest) Regulations 19952;
“pension business” has the meaning given by section 431B of the Taxes Act3;
“relevant gilt-edged securities” has the meaning given by section 51B(5) of the Taxes Act;
“return period” has the same meaning as in the Gilts Regulations;
“Schedule 19AB” means Schedule 19AB to the Taxes Act4;
“the Taxes Act” means the Income and Corporation Taxes Act 19885.
Basic rule
3.—(1) Where the condition specified in paragraph (3) below is satisfied, then, notwithstanding the provisions of the Gilts Regulations, an insurance company carrying on pension business shall not be required to include in its return for any return period the amount of tax on the amount of excess gilt interest received which is referable to the company’s pension business.
(2) Where paragraph (1) above applies, the company is accordingly required to include in its return for the return period only—
(a)
(a) the aggregate of the amount of manufactured gilt interest received and of the amount of real gilt interest received, and
(b)
(b) the amount of manufactured gilt interest paid,
which is not included in a claim for a notional repayment made pursuant to sub-paragraph (1) of paragraph 1A of Schedule 19AB (as inserted by regulation 6 of these Regulations and referred to in this regulation as “sub-paragraph (1)”).
(3) The condition specified is that the amount of tax referred to in paragraph (1) above is identified in a claim, made by the specified date, for a notional repayment made pursuant to sub-paragraph (1).
(4) In sub-paragraph (3) above “the specified date” means the date—
(a)
(a) 14 days after the end of the return period, or
(b)
(b) in a case where the return for the return period is made on a date less than 14 days from the end of the return period, that date,
whichever is the earlier.
Modifications of Schedule 19AB
4. Regulations 5 to 10 make provision modifying the operation of Schedule 19AB in relation to cases where payments of interest on relevant gilt-edged securities are made without deduction of tax to insurance companies carrying on pension business.
5.—(1) Paragraphs (2) and (3) below specify modifications of paragraph 1 of Schedule 19AB.
(2) In sub-paragraph (2), before the words “For the purposes of this paragraph” there shall be inserted the words “Subject to sub-paragraphs (2A) to (2C) below,”.
(3) After sub-paragraph (2) there shall be inserted the following sub-paragraphs—
“2A Sub-paragraphs (2B) and (2C) below have effect where payments of interest on relevant gilt-edged securities are made without deduction of tax to companies carrying on pension business.
2B Subject to sub-paragraph (2C) below, for the purposes of this paragraph, a “provisional repayment period” of a company—
(a) shall begin whenever—
(i) the company begins to carry on pension business;
(ii) an accounting period of the company begins, at a time when the company is carrying on such business; or
(iii) a provisional repayment period of the company ends, at a time when the company is carrying on such business; and
(b) shall end on the first occurrence of either of the following—
(i) the expiration of a period ending with 31st March, 30th June, 30th September or 31st December which falls within an accounting period of the company, or
(ii) the end of an accounting period of the company.
2C In a case where, on 1st January 1996, the company either—
(a) holds a relevant gilt-edged security on which the next payment of interest will be made without deduction of tax, or
(b) has entered into a transaction which may give rise to an amount of manufactured gilt interest received,
a provisional repayment period shall begin on 1st January 1996 (with, accordingly, the end of a provisional repayment period on 31st December 1995, whether or not a provisional repayment period would otherwise have ended on that day).”.
6. After paragraph 1 of Schedule 19AB there shall be inserted the following paragraph—
“Entitlement to certain notional payments on account
1A.—(1) An insurance company carrying on pension business shall for each provisional repayment period in an accounting period be entitled on a claim made in that behalf by the specified date to a notional payment (in this Schedule referred to as a “notional repayment”) of an amount equal to the tax on the appropriate portion of the amount of excess gilt interest received in that provisional repayment period as is referable to its pension business, or of such lesser amount as may be specified in the claim.
(2) No repayment shall be made to a company in respect of any claim to a notional repayment; but the notional repayment shall be taken to be the amount of tax referred to in regulation 3(1) of the Insurance Companies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1995.
(3) Subject to sub-paragraphs (4) and (5) below, for the purposes of this paragraph, a “provisional repayment period” of a company—
(a)
(a) shall begin whenever—
(i) the company begins to carry on pension business;
(ii) an accounting period of the company begins, at a time when the company is carrying on such business; or
(iii) a provisional repayment period of the company ends, at a time when the company is carrying on such business; and
(b)
(b) shall end on the first occurrence of either of the following—
(i) the expiration of a period ending with 31st March, 30th June, 30th September or 31st December which falls within an accounting period of the company, or
(ii) the end of an accounting period of the company.
(4) In a case where, on 1st January 1996, the company either—
(a)
(a) holds a relevant gilt-edged security on which the next payment of interest will be made without deduction of tax, or
(b)
(b) has entered into a transaction which may give rise to an amount of manufactured gilt interest received,
a provisional repayment period shall begin on 1st January 1996 (whether or not a provisional repayment period would otherwise have begun on that day).
(5) Subject to sub-paragraph (4) above, in a case where, on or after 1st January 1996, the company receives either—
(a)
(a) a payment of interest on a relevant gilt-edged security made to it without deduction of tax, or
(b)
(b) a payment which for the purposes of Schedule 23A is a payment of manufactured interest and to which paragraph 3A of Schedule 23A applies,
a provisional repayment period shall begin on a day ascertained in accordance with paragraph 1(2)(a) above and shall end on a day ascertained in accordance with sub-paragraph (3)(b) above.
(6) In sub-paragraph (1) above “the specified date” means the date—
(a)
(a) 14 days after the end of the provisional repayment period, or
(b)
(b) in a case where a provisional repayment period coincides with a return period within the meaning of the Gilts Regulations and the return for the return period is made on a date less than 14 days from the end of the return period, that date,
whichever is the earlier.
(7) In the application of subsections (5) to (9) of section 432A for the purpose of determining the amounts to which a company is entitled by way of notional repayments in the case of any accounting period, the reference in subsection (5) to “the relevant fraction” shall be taken as a reference to a fraction determined in accordance with subsections (6) to (9)—
(a)
(a) for the latest preceding accounting period of the company for which an inspector is satisfied that the company has supplied him with such information as would enable the relevant fraction for that accounting period to be estimated with reasonable accuracy, and
(b)
(b) by reference to that information,
and, subject to sub-paragraph (8)(b) below, any reference in this paragraph to “the provisional fraction” is a reference to the fraction so determined.
(8)...
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