Part II Credit Agreements, Hire Agreements and Linked Transactions

16AF1Exemption relating to high net worth debtors and hirers

1

The Secretary of State may by order provide that this Act shall not regulate a consumer credit agreement or a consumer hire agreement where—

a

the debtor or hirer is a natural person;

b

the agreement includes a declaration made by him to the effect that he agrees to forgo the protection and remedies that would be available to him under this Act if the agreement were a regulated agreement;

c

a statement of high net worth has been made in relation to him; and

d

that statement is current in relation to the agreement and a copy of it was provided to the creditor or owner before the agreement was made.

2

For the purposes of this section a statement of high net worth is a statement to the effect that, in the opinion of the person making it, the natural person in relation to whom it is made—

a

received during the previous financial year income of a specified description totalling an amount of not less than the specified amount; or

b

had throughout that year net assets of a specified description with a total value of not less than the specified value.

3

Such a statement—

a

may not be made by the person in relation to whom it is made;

b

must be made by a person of a specified description; and

c

is current in relation to an agreement if it was made during the period of one year ending with the day on which the agreement is made.

4

An order under this section may make provision about—

a

how amounts of income and values of net assets are to be determined for the purposes of subsection (2)(a) and (b);

b

the form, content and signing of—

i

statements of high net worth;

ii

declarations for the purposes of subsection (1)(b).

5

Where an agreement has two or more debtors or hirers, for the purposes of paragraph (c) of subsection (1) a separate statement of high net worth must have been made in relation to each of them; and paragraph (d) of that subsection shall have effect accordingly.

6

In this section—

  • ‘previous financial year’ means, in relation to a statement of high net worth, the financial year immediately preceding the financial year during which the statement is made;

  • ‘specified’ means specified in an order under this section.

7

In subsection (6) ‘financial year’ means a period of one year ending with 31st March.

8

Nothing in this section affects the application of sections 140A to 140C.