The Stamp Duty and Stamp Duty Reserve Tax (Open-ended Investment Companies) Regulations 1997

Explanatory Note

(This note is not part of the Regulations)

These Regulations make provision for the application of the enactments relating to stamp duty and stamp duty reserve tax to open-ended investment companies (within the meaning of the Financial Services Act 1986 (c. 60)) which are incorporated in the United Kingdom. The Regulations secure that the enactments in question have effect in relation to open-ended investment companies in the same manner as the manner in which they have effect in relation to authorised unit trusts.

Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.

Regulation 3 applies the regulatory powers in section 57 of the Finance Act 1946 (unit trust schemes) to open-ended investment companies.

Regulation 4 makes provision in relation to the repurchase of shares by the authorised corporate director of an open-ended investment company.

Regulation 5 provides that bearer securities issued by an open-ended investment company in a currency other than sterling shall be treated, for the purposes of stamp duty and stamp duty reserve tax, as if they had been issued in sterling.

Regulation 6 exempts from the charge to stamp duty transfers of shares in open-ended investment companies that deal only in gilt-edged securities.

Regulations 7 to 10 exempt from the charge to stamp duty or stamp duty reserve tax transfers of property, or agreements to transfer securities, to an open-ended investment company on the occasion of the conversion of an authorised unit trust to, or the amalgamation of an authorised trust with, that open-ended investment company. Regulation 9 (exemption from stamp duty charge on an amalgamation) applies to instruments executed before 1st July 1999. Regulation 10 (exemption from stamp duty reserve tax on an amalgamation) applies to unconditional agreements to transfer made before 1st July 1999 and to conditional agreements to transfer where the condition is satisfied before that date.

Regulation 11 disapplies section 42 of the Finance Act 1930 (relief from stamp duty in the case of transfers of property between associated companies) in relation to transfers to or from open-ended investment companies.

Regulation 12 disapplies sections 75 to 77 of the Finance Act 1986 (acquisition by a company of another company) in relation to open-ended investment companies.