The Insurance Companies (Pension Business) (Transitional Provisions) (Amendment) Regulations 1997

Explanatory Note

(This note is not part of the Regulations)

Schedule 19AB to the Income and Corporation Taxes Act 1988 (“Schedule 19AB”) provides that insurance companies carrying on pension business shall be entitled to provisional repayments of tax on pension business investment income. However, paragraph 4 of Schedule 19AB provides that during a transitional period, the Commissioners of Inland Revenue may make provision, by regulations, for the amount of a provisional repayment to be reduced by a prescribed percentage for any accounting period ending during that transitional period. The regulations may prescribe different percentages for accounting periods ending after different dates falling within the transitional period. The transitional period is defined as beginning with accounting periods ending after the date specified in the regulations as “the opening transitional date” and ending with accounting periods ending before the date specified in the regulations as “the closing transitional date”.

The Insurance Companies (Pension Business) (Transitional Provisions) Regulations 1992 (S.I. 1992/2326) (“the principal Regulations”) specify the opening transitional date as 2nd October 1992 and the closing transitional date as 1st January 1999 and, as amended by S.I. 1993/3109, 1994/3036 and 1995/3134, prescribe different percentages for accounting periods ending after different dates falling within the transitional period.

These Regulations further amend the principal Regulations by prescribing 7.5 per cent. as the appropriate percentage for any accounting period ending after 31st December 1995 and before 1st January 1998. As a consequence, provisional repayments falling within accounting periods ending after 31st December 1997 and before 1st January 1999 are not (as the principal Regulations stand at present) subject to any percentage reduction.