Personal Equity Plan Regulations 1986
| Jurisdiction | UK Non-devolved |
| Citation | SI 1986/1948 |
| Year | 1986 |
1986No. 1948
INCOME TAX
The Personal Equity Plan Regulations 1986
17thNovember1986
19thNovember1986
1stJanuary1987
ARRANGEMENT OF REGULATIONS
1. Citation and commencement
2. Interpretation
3. Introductory
4. General conditions for plans
5. General investment rules
6. Qualifying investments
7. Cash investment limit and treatment of excess
8. Interest on cash deposits--manner of payment and tax charges
9. Qualifying individuals who may invest under a plan
10. Plan investor ceasing to qualify
11. Conditions for application to subscribe to a plan
12. Minimum holding period
13. Maximum investment limit
14. Withdrawal by individual during minimum holding period to render plan void
15. Death of plan investor before expiry of minimum holding period
16. Plan manager--qualifications and Board's approval
17. Plan manager--withdrawal by Board of approval
18. Plan manager--appeal against withdrawal of Board's approval
19. Plan manager ceasing to act
20. Plan manager ceasing to qualify
21. Transfer of plans to other plan managers
22. Exemption from tax of plan income and gains
23. Tax liabilities and reliefs--plan manager to act on behalf of plan investor
24. Repayments in respect of tax to plan manager--interim claims
25. Repayments in respect of tax to plan manager--annual returns and annual claims
26. Plan manager's returns and claims--supplementary provisions
27. Assessments for withdrawing relief and recovering tax
28. Records to be kept by plan manager
29. Information to be given to plan investor by plan manager
30. Information to be provided to the Board
31. Inspection of records by officer of the Board
32. Capital gains tax--adaptation of enactments
33. Administration of tax in relation to plans--supplementary
The Treasury, in exercise of the powers conferred upon them by Schedule 8 to the Finance Act 1986( a), hereby make the following Regulations:--
Citation and commencement
1. These Regulations may be cited as the Personal Equity Plan Regulations 1986 and shall come into operation on 1st January 1987.
Interpretation
2.--(1) In these Regulations unless the context otherwise requires:--
(a) "the Board" means the Commissioners of Inland Revenue; an "exempt investment" means an investment in a mature portfolio; "gains" means "chargeable gains" within the meaning of the Capital Gains Tax Act 1979( b);
"investment trust" has the same meaning as in section 359 of the Taxes Act;
"the Management Act" means the Taxes Management Act 1970( c);
"market value" shall be construed in accordance with section 150 of the Capital Gains Tax Act 1979;
a "mature portfolio" is a portfolio of plan investments which are held under a plan after the expiry of the minimum holding period (within the meaning of Regulation 12);
"notice" means notice in writing and "notify" shall be construed accordingly;
"ordinary share" means a share which forms part of a company's ordinary share capital (within the meaning of section 526(5) of the Taxes Act);
a "plan investment" is an investment under a plan which is a qualifying investment within the meaning of Regulation 6;
a "plan investor" is an individual who subscribes to a plan and who is a qualifying individual within the meaning of Regulation 9;
a "plan manager" is a person who fulfils the conditions of these Regulations and is approved by the Board for the purpose of these Regulations as a plan manager;
"recognised stock exchange" has the same meaning as in section 535 of the Taxes Act;
"share" includes stock;
"tax" where neither income tax nor capital gains tax is specified means either of those taxes;
(a) 1986 c. 41.
(b) 1979 c. 14.
(c) 1970 c. 9.
"tax credit" means a credit under section 86 of the Finance Act 1972( a);
"tax year" means a year beginning with 6th April in any year and ending with 5th April in the following year;
"the Taxes Act" means the Income and Corporation Taxes Act 1970( b):
"year" means a calendar year.
(b) "authorised unit trust" and "unit holder" have the same meaning as in section 358 of the Taxes Act and references to a "unit" include references to a fraction of a unit.
(2) The Table below indexes other definitions in these Regulations:
Term defined |
Regulation |
||
Cash investment limit |
7 |
||
Minimum investment limit |
13 |
||
Minimum holding period |
|||
Plan |
|||
Qualifying individual |
|||
Qualifying investments |
Introductory
3. These Regulations provide for the setting up of plans by plan managers approved by the Board under which individuals may make certain investments, for the conditions under which they may invest and under which those plans are to operate, for relief from tax in respect of plan investments and generally for the administration of tax in relation to plans.
General conditions for plans
4.--(1) A plan is a scheme of investment to which an individual who is a qualifying individual may subscribe and in respect of which the following conditions must be fulfilled--
(a) a qualifying individual may subscribe to only one plan in any year;
(b) the individual may not subscribe to a plan otherwise than by means of a sum or sums of his cash paid directly to the plan manager;
(c) the individual's cash subscription may not exceed £2,400 in any year;
(d) the individual may not subscribe further to a plan after the end of the year in which his subscription to that plan begins.
(2) A plan must be managed in accordance with these Regulations by a plan manager and under terms agreed in writing between the plan manager and the plan investor.
(3) Apart from other requirements of these Regulations the terms agreed to which paragraph (2) refers shall include the following conditions--
(a) 1972 c. 41
(b) 1970 c. 10.
(a) that the plan investments shall be in the beneficial ownership of the plan investor:
(b) that the title to the plan investments shall be vested in the plan manager or his nominee or jointly in one of them and the plan investor;
(c) that the share certificate or other document evidencing title to a plan investment shall be held by the plan manager or as he may direct;
(d) that the plan manager shall arrange for the plan investor to receive a copy of the annual report and accounts issued by every company or other concern in respect of shares or units (as the case may be) which are his plan investments;
(e) that the plan manager shall be under an obligation (subject to any provisions made by or under any other enactment and if the plan investor so elects) to arrange for the plan investor to be able--
(i) to attend shareholders' or unit holders' meetings,
(ii) to vote, and
(iii) to receive, in addition to the documents referred to in paragraph (d) above, any other information issued to shareholders or unit holders:
(f) that the proceeds of shares (including dividends and other rights), not being shares in an investment trust, which are plan investments, may be invested under the plan only by way of cash deposit or in other such shares;
(g) that at the request of the plan investor and within such time as shall be agreed an entire plan with all rights and obligations of the parties to it may be transferred to another plan manager;
(h) that the plan manager shall notify the plan investor if by reason of any failure to satisfy the provisions of these Regulations a plan has or will become void
General investment rules
5.--(1) All transactions whether by way of sale, purchase or otherwise by a plan manager in investments under a plan shall be made at the price which those investments might reasonably be expected to fetch in the open market.
(2) Investments may not at any time be purchased or made otherwise than out of cash which a plan manager holds (and is entitled under the provisions of these Regulations to hold) under a plan at that time.
(3) Where cash which is available for investment from more than one plan is invested under one or more of those plans the investments will fall to be allocated to a plan in proportion to the cash drawn therefrom in respect of the investments.
(4) A plan investor's cash subscription and any other cash held by a plan manager which he is entitled to hold under a plan shall be held only in sterling and in an account designated for the purposes of these Regulations only.
(5) Cash by way of dividends, other rights or proceeds in respect of shares,not being shares in an investment trust, which are held as plan investments may be invested only by way of cash deposit or in other such shares.
(6) All exempt investments of a plan investor under a plan or plans managed by the same plan manager shall, for the purposes of these Regulations, be treated as being merged to become one plan comprising a mature portfolio.
Qualifying investments
6.-- (1) This Regulation specifies the kind of investments ("qualifying investments") which may be purchased, made or held under a plan.
(2) Qualifying investments to which paragraph (1) refers are--
(a) ordinary shares, not being shares in an investment trust, issued by a company which is incorporated in the United Kingdom and quoted in the official list of a recognised stock exchange in the United Kingdom or dealt in on the Unlisted Securities Market;
(b) investments in--
(i) an investment trust, or
(ii) an authorised unit trust,
provided that the total amount of the cash subscription under the plan so invested shall not exceed £420 or one quarter of the total for the time being of the subscription whichever is the greater;
(c) cash which the plan manager is entitled to hold for investment under a plan.
Cash investment limit and treatment of excess
7.--(1) Subject to the provisions of this Regulation, from the end of the year in which the plan investor begins to subscribe to a plan, the plan manager shall be entitled to hold cash as a plan investment only up to the amount of the limit ("cash investment limit") which this Regulation provides.
(2) The cash investment limit for any plan to which paragraph (1) refers is at any time--
(a) £240 or, if more,
(b) (i)...
To continue reading
Request your trial