The Insurance Companies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) (Amendment) Regulations 1996

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Insurance Companies (Gilt-edged Securities) (Periodic Accounting for Tax on Interest) Regulations 1995 (S.I. 1995/3223) (“the principal Regulations”) to take account of provisions in the Finance Act 1996 (c. 8). They also make amendments of a drafting nature to the principal Regulations.

Regulation 3 amends regulation 6 of the principal Regulations to take account of an amendment made to section 51B of the Income and Corporation Taxes Act 1988 by paragraph 4 of Schedule 6 to the Finance Act 1996 which provides for interest to be charged to tax at the lower rate instead of at the basic rate in relation to the year 1996-97 and subsequent years of assessment. This regulation has effect in relation to all payments of interest on relevant gilt-edged securities made without deduction of tax on or after 6th April 1996; and specific additional provision has been made for the case of a provisional repayment period which begins before, but includes, 6th April 1996. Authority for the retrospective effect of this Regulation is given by paragraph 4(2) of Schedule 6 to the Finance Act 1996.

Regulation 4 makes amendments of a drafting nature to regulation 7 of the principal Regulations.

Regulation 5 amends regulation 8(3) of the principal Regulations to take account of amendments made to Schedule 19AB to the Income and Corporation Taxes Act 1988 by Schedule 34 to the Finance Act 1996.