(This note is not part of the Regulations)
These Regulations, which come into force on 6th April 1991, furtheramend the Personal Equity Plan Regulations 1989 (“the principal Regulations”). The principal effects of the Regulations are to remove therequirement that cash held by a plan manager in an account with adeposit-taker or building society be held in circumstances where, in thecase of an account with a deposit-taker, the deposit-taker is liable toaccount for composite rate tax on interest payments or, in the case ofan account with a building society, the reduced rate amount payable bythe society includes an amount calculated by applying the reduced rateto interest payments; to authorise the holding of paired shares as planinvestments subject to the same restrictions as apply to unit trusts,funds of funds and investment trusts; to increase the amount that may beinvested in authorised unit trusts, funds of funds and investment trustswhich do not satisfy the requirements of regulation 6 of the principalRegulations to £1,500; and to remove the relaxation of thesubscription conditions in relation to rights issues.
The requirements as to the holding of cash deposits is replacedby provisions that interest on a cash deposit which is a plan investmentis to be paid gross and that, if the plan manager makes payments ofinterest in excess of£180 in any year to or at the direction of the plan investor, heis to deduct, and account to the Commissioners of Inland Revenue (“the Board”) for, income tax at the basic rate on the amount of all suchpayments in the year.
The Regulations also make a number of minor amendments andcorrections to the drafting of the principal Regulations.
Regulation 1 provides for citation and commencement.
Regulation 2 contains definitions.
Regulation 3 omits a redundant definition from regulation 2(1)(a) ofthe principal Regulations.
Regulation 4 amends regulation 4 of the principal Regulations byextending the time within which shares allotted or allocated following apublic offer are to be transferred to a plan from 30 to 42 days.
Regulation 5 amends the requirements in regulation 5(3) of theprincipal Regulations which are to be satisfied when a plan managerholds cash in an account with a deposit-taker or building society.
Regulation 6 adds units comprising paired shares to the list ofqualifying investments in regulation 6 of the principal Regulationssubject to the condition referred to above and increases the amountwhich may be invested in authorised unit trusts, funds of funds andinvestment trusts which do not satisfy the requirements of thatregulation to £1,500.
Regulation 7 amends regulation 6A(2) and adds a further ruleapplying after 5th April 1991 to plans in which non-qualifyinginvestments were held on 5th April 1990.
Regulation 8 makes an amendment to regulation 7 of the principalRegulations which is consequent on regulation 9.
Regulation 9 omits regulation 10 of the principal Regulations.
Regulation 10 amends regulation 17 of the principal Regulations andprovides that interest paid on a cash deposit with a deposit-taker orbuilding society which is a plan investment is to be paid gross.
Regulation 11 inserts a new regulation 17A in the principalRegulations the effect of which is that, where a plan manager paysinterest received by him on a cash deposit which is a plan investment toor at the direction of the plan investor, and the aggregate of suchpayments in any year exceeds £180, he is to account to the Boardfor basic rate tax on all such payments in the year.
Regulation 12 makes an amendment to regulation 18(3) of theprincipal Regulations which is consequent on the new regulation 17A.