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National Insurance Contributions and Statutory Payments Act 2004

ANNEX A: Section 420 of the Income Tax (Earnings and Pensions) Act 2003 (as substituted by Schedule 22 to the Finance Act 2003)

Interpretation of Chapters 1 to 5

Meaning of "securities" etc


(1)Subject to subsections (5) and (6), for the purposes of this Chapter and Chapters 2 to 5 the following are "securities"-

(a)shares in any body corporate (wherever incorporated) or in any unincorporated body constituted under the law of a country or territory outside the United Kingdom,

(b)debentures, debenture stock, loan stock, bonds, certificates of deposit and other instruments creating or acknowledging indebtedness,

(c)warrants and other instruments entitling their holders to subscribe for securities (whether or not in existence or identifiable),

(d)certificates and other instruments conferring rights in respect of securities held by persons other than the persons on whom the rights are conferred and the transfer of which may be effected without the consent of those persons,

(e)units in a collective investment scheme,

(f)futures, and

(g)rights under contracts for differences or contracts similar to contracts for differences.

(2)In subsection (1)(e) "collective investment scheme" means arrangements-

(a)which are made with respect to property of any description, including money, and

(b)the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.

(3)In subsection (1)(f) "futures" means rights under a contract for the sale of a commodity or other property under which delivery is to be made at a future date at a price agreed when the contract is made; and for this purpose a price is to be taken to be agreed when the contract is made-

(a)if it is left to be determined by reference to the price at which a contract is to be entered into on a market or exchange or could be entered into at a time and place specified in the contract, and

(b)in a case where the contract is expressed to be by reference to a standard lot and quality, even if provision is made for a variation in the price to take account of any variation in quantity or quality on delivery.

(4)For the purposes of subsection (1)(g) a contract similar to a contract for differences is a contract-

(a)which is not a contract for differences, but

(b)the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the value or price of property or an index or other factor designated in the contract.

(5)The following are not "securities" for the purposes of this Chapter or Chapters 2 to 5-

(a)cheques and other Acts of exchange, bankers' drafts and letters of credit (other than Acts of exchange accepted by a banker),

(b)money and statements showing balances on a current, deposit or savings account,

(c)leases and other dispositions of property and heritable securities,

(d)rights under contracts of insurance (within the meaning of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001), and


(6)The Treasury may by order amend subsections (1) to (5).

(7)An order under subsection (6) may include any appropriate consequential provision (including provision amending any enactment).

(8)In this Chapter and Chapters 2 to 5-

  • "interest", in relation to securities (or shares), means an interest in them less than full beneficial ownership and includes an interest in proceeds of their sale, but does not include a right to acquire them,

  • "securities option" means a right to acquire securities, and

  • "shares" includes stock.

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