The Insurance Companies (Pension Business)(Transitional Provisions) (Amendment) Regulations 1996

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Insurance Companies (Pensions Business) (Transitional Provisions) Regulations 1992 (S.I. 1992/2326) (“the principal Regulations”) which were made under powers contained in Schedule 19AB to the Income and Corporation Taxes Act 1988 (“Schedule 19AB” and “the 1988 Act” respectively). Schedule 19AB provides that insurance companies carrying on pension business shall be entitled to provisional repayments of tax on pension business investment income.

The amendments made by these Regulations have been made for two different reasons.

First, regulation 3 makes an amendment of a drafting nature, as Chapter I of Part XII of the 1988 Act refers to pension business and not to pensions business. Schedule 19AB is introduced by section 438A of the 1988 Act, and accordingly forms part of that Chapter. Section 438A of the 1988 Act was inserted by section 49(1) of the Finance Act 1991 (c. 31).

Secondly, regulations 4, 5 and 6 make amendments as a consequence of new enactments relating to the taxation of interest on gilt-edged securities. The amendments provide for the principal Regulations to extend to notional repayments of tax on pension business investment income attributable to interest on gilt-edged securities, for which provision is made in the Insurance Companies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1995 (S.I. 1995/3223), as well as to provisional repayments.