The Friendly Societies (Provisional Repayments for Exempt Business) Regulations 1999

Explanatory Note

(This note is not part of the Regulations)

Schedule 19AB to the Income and Corporation Taxes Act 1988 (“Schedule 19AB”) applies to an insurance company carrying on pension business, and makes provision for provisional repayments of income tax borne by deduction on payments received by the company.

Section 121 of the Finance Act 1993 empowers the Treasury to provide by regulations for Schedule 19AB to have effect in relation to the tax exempt business of a friendly society as it has effect in relation to the pension business of an insurance company, with such modifications and exceptions as may be specified in the regulations. The Friendly Societies (Provisional Repayments for Exempt Business) Regulations 1993 (S.I. 1993/3112) (“the 1993 Regulations”), as amended by the Friendly Societies (Provisional Repayments for Exempt Business) (Amendment) Regulations 1997 (S.I. 1997/474) (“the 1997 Amending Regulations”) provided for Schedule 19AB to have such effect.

Schedule 19AB was amended by Schedule 34 to the Finance Act 1996 (“Schedule 34”) and Schedule 3 to the Finance (No. 2) Act 1997 (“Schedule 3”) so as to have effect in relation to provisional repayment periods falling in accounting periods ending on or after 1st July 1999, being the day appointed in relation to corporation tax self assessment. So far as the regulatory power in section 121 of the Finance Act 1993 is concerned, the amendments made by Schedule 3 have effect only in relation to distributions made to friendly societies on or after 6th April 2004. These Regulations make provision for Schedule 19AB as amended by Schedule 34 and Schedule 3 to have effect in relation to friendly societies for the purposes of corporation tax self assessment. They also revoke the 1993 Regulations and the 1997 Amending Regulations so far as concerns corporation tax self assessment.

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

Regulation 3 provides that Schedule 19AB shall have effect in relation to the tax exempt business of friendly societies subject to modifications and exceptions which are specified in regulations 4 to 12. Because Schedule 3 amends sub-paragraph (1) of paragraph 1 of Schedule 19AB in such a way as to result in the need for different modifications in these Regulations, regulations 4 and 5 modify that paragraph as it has effect without the amendments made by Schedule 3 (so as to apply to distributions made to friendly societies before 6th April 2004), and regulations 6 and 7 modify that paragraph as it has effect with those amendments (so as to apply to distributions made to friendly societies on or after that date). Amendments made by Schedule 3 to other paragraphs of Schedule 19AB do not affect the modifications.

Regulation 13 revokes the 1993 and the 1997 Amending Regulations.