The Personal Equity Plan (Amendment) Regulations 1998

Explanatory Note

(This note is not part of the Regulations)

These Regulations further amend the Personal Equity Plan Regulations 1989 (S.I. 1989/469 as amended by S.I. 1990/678, 1991/733, 2774, 1992/623, 1993/756, 1995/1539, 3287, 1996/846, 1355, 1997/511, 1716 (“the principal Regulations”)) and come into force on 21st August 1998. The first main effect of the Regulations is that no further subscriptions may be made to existing personal equity plans, and no new plans may be set up, on or after 6th April 1999. The Regulations also contain amendments to the reporting requirements of plan managers which are consequential on the ending of subscriptions.

The second main effect of the Regulations is to amend the adaptation of the capital gains tax provisions by the principal Regulations to take account of the abolition of pooling of securities for capital gains tax purposes by the Finance Act 1998 in relation to disposals on or after 6th April 1998 and of the changes in the identification rules made by that Act in relation to disposals on or after 17th March 1998.

Regulation 1 provides for citation, commencement and effect and regulation 2 contains definitions.

Regulation 3 substitutes references to the Financial Services Authority for references to the Securities and Investments Board in certain definitions in the principal Regulations.

Regulation 4 contains the amendment of regulation 4 of the principal Regulations (general conditions for plans and subscriptions to plans) providing that subscriptions to plans must be made before 6th April 1999.

Regulation 5 makes an amendment which is consequential on the ending of subscriptions and removes a provision of the principal Regulations which will no longer be required.

Regulation 6 is consequential on the ending of subscriptions and removes three regulations from the principal Regulations which deal with applications to subscribe to plans.

Regulation 7 makes an amendment which is consequential on the ending of subscriptions in relation to the reporting requirements for plan managers on the transfer of a plan.

Regulation 8 amends regulation 17 of the principal Regulations (exemption from tax of plan income and gains) by adding a further paragraph providing that a plan investor does not cease to be entitled to payment of tax credits on distributions from plan investments because he ceases to be resident in the United Kingdom.

Regulation 9 makes an amendment which is consequential on the ending of subscriptions in relation to the reporting requirements for plan managers when making interim claims.

Regulation 10 makes an amendment to regulation 24 of the principal Regulations (information to be given to plan investor by plan manager) which is consequential on the ending of subscriptions.

Regulation 11 makes an amendment to the annual reporting requirements for plan managers in relation to plans for which they act during any year.

Regulation 12 makes amendments to regulation 27 of the principal Regulations (capital gains tax—adaptation of enactments) which are consequential on the abolition of pooling of securities for capital gains tax purposes and on changes in the identification rules on the disposal of securities made by the Finance Act 1998 with effect from 6th April 1998.

Regulation 13 makes an amendment to regulation 27 of the principal Regulations which is consequential on the change made to the identification rules on the disposal of securities by the Finance Act 1998 for the period from 17th March 1998 to 5th April 1998.

Authority for the retrospective effect of regulations 12 and 13 is given by section 123(7) of the Finance Act 1998.