text:
Citation, Commencement and application
1
1
These Regulations may be cited as the Export Control (Al-Qaida and Taliban Sanctions) Regulations 2011 and come into force on 30th November 2011.
2
An offence may be committed under these Regulations —
a
in the United Kingdom by any person;
b
elsewhere by any person who is a United Kingdom person within the meaning of section 11 of the Export Control Act 2002 .
Amendment of the Al-Qa’ida and Taliban (United Nations Measures) Order 2002
2
Articles 3, 4 and 5 of the Al-Qa’ida and Taliban (United Nations Measures) Order 2002 are omitted.
Interpretation
3
In these Regulations —
“the 1979 Act ” means the Customs and Excise Management Act 1979 ;
“the 2008 Order ” means the Export Control Order 2008 ;
“the Al-Qaida Regulation ” means Council Regulation (EC) No 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with the Al-Qaida network and a reference to Annex I to that Regulation is to be construed as a reference to that Annex as amended from time to time;
“the Taliban Regulation ” means Council Regulation (EU) No 753/2011 concerning restrictive measures directed against certain individuals, groups, undertakings and entities in view of the situation in Afghanistan and a reference to Annex I to that Regulation is to be construed as a reference to that Annex as amended from time to time.
Offences supplementing the Al-Qaida Regulation
4
1
A person commits an offence and may be arrested who contravenes a prohibition in Article 3 of the Al-Qaida Regulation (prohibition on provision of technical advice, assistance or training related to military activities to any natural or legal person, entity, body or group listed in Annex I).
2
A person commits an offence and may be arrested who participates, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to promote the transactions referred to in Article 3 of the Al-Qaida Regulation.
Offences supplementing the Taliban Regulation
5
1
A person commits an offence and may be arrested who contravenes a prohibition in Article 2(a) of the Taliban Regulation (prohibition on provision of technical assistance related to the goods and technology listed in the Common Military List of the European Union to any person, group, undertaking or entity listed in Annex I).
2
A person commits an offence and may be arrested who participates, knowingly and intentionally, in activities the object or effect of which is to circumvent the prohibition in Article 2(a) of the Taliban Regulation.
Overlap with the 2008 Order
6
A person is not guilty of an offence under the 2008 Order who would, apart from this article, be guilty of —
a
an offence under these Regulations; and
b
a corresponding offence under the 2008 Order.
Penalties
7
1
A person guilty of an offence under regulation 4 or 5 is liable —
a
on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or to both;
b
on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both.
Application of the 1979 Act
8
1
A matter is to be treated as an assigned matter which the Commissioners for Her Majesty’s Revenue and Customs investigate or propose to investigate with a view to determining —
a
whether there are grounds for believing that an offence under these Regulations has been committed; or
b
whether a person should be prosecuted for such an offence.
2
Section 138 of the 1979 Act (provision as to arrest of persons) applies to the arrest of a person for an offence under these Regulations as it applies to the arrest of a person for an offence under the customs and excise Acts.
3
Sections 145 , 146 , 146A , 147 , 148, 150 , 151 , 152 , 154 , and 155 of the 1979 Act (proceedings for offences, mitigation of penalties, proof and other matters) apply in relation to offences and penalties under these Regulations as they apply in relation to offences and penalties under the customs and excise Acts.
4
“The customs and excise Acts” and “assigned matter” have the same meanings as in section 1 of the 1979 Act.
Review
9
1
The Secretary of State must from time to time —
a
carry out a review of regulations 1 and 3 to 8,
b
set out the conclusions of the review in a report, and
c
publish the report.
2
In carrying out the review the Secretary of State must, so far as is reasonable, have regard to the rules on penalties applicable to infringements of the provisions of the Al-Qaida Regulation and the Taliban Regulation and the measures taken to implement them in other member States.
3
The report must in particular —
a
set out the objectives intended to be achieved by the rules on penalties applicable to infringements of the provisions of the Al-Qaida Regulation and the Taliban Regulation established by those regulations and the measures taken to implement them,
b
assess the extent to which those objectives are achieved, and
c
assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.
4
The first report under this regulation must be published before the end of the period of five years beginning with the day on which these Regulations come into force.
5
Reports under this regulation are afterwards to be published at intervals not exceeding five years.
Mark Prisk
Minister of State for Business and Enterprise
Department for Business, Innovation and Skills
3rd November 2011


type: legislation

jurisdiction: UK

text:
Citation and commencement
1
1
These Regulations may be cited as the Social Security (Miscellaneous Amendments) Regulations 2011.
2
Regulations 1 and 12 to 15 come into force on 4th April 2011 in relation to any case where rent is payable at intervals of a week or any multiple of whole weeks, and in any other case on 1st April 2011.
3
Regulations 3(5) and (6)(a), 7(6) and (7)(c), 11 and 16(11)(a), (12) and (13), so far as they relate to a particular claimant, come into force on the first day of the first benefit week to commence for that claimant on or after 11th April 2011.
4
All other regulations come into force on 11th April 2011.
5
In this regulation “benefit week” has the same meaning —
a
for income support, as in regulation 2(1) (interpretation) of the Income Support (General) Regulations 1987 ;
b
for jobseeker’s allowance, as in regulation 1(3) (citation, commencement and interpretation) of the Jobseeker’s Allowance Regulations 1996 ; and
c
for employment and support allowance, as in regulation 2(1) (interpretation) of the Employment and Support Allowance Regulations 2008 .
Amendments to the Social Security (General Benefit) Regulations 1982
2
For regulation 16 of the Social Security (General Benefit) Regulations 1982 (earnings level for the purposes of unemployability supplement under section 58 of the Social Security Act 1975) substitute —
16
1
For the purposes of section 58(3) (earnings level that does not disqualify for unemployability supplement) the prescribed amount of earnings in a year is determined as follows–
a
multiply the National Minimum Wage by 16;
b
where the amount determined by the calculation in sub-paragraph (a) would, but for this sub-paragraph, include an amount of–
i
less than 50p, the amount determined under sub-paragraph (a) shall be rounded up to the nearest 50p, or
ii
less than £1 but more than 50p, the amount determined under sub-paragraph (a) shall be rounded up to the nearest £1; and
c
multiply the amount resulting from sub-paragraph (a) or (b) by 52.
2
In this regulation “National Minimum Wage” means the rate of the national minimum wage specified in regulation 11 of the National Minimum Wage Regulations 1999 (rate of the national minimum wage).
.
Amendments to the Income Support (General) Regulations 1987
3
1
The Income Support (General) Regulations 1987 are amended as follows.
2
In regulation 31 (date on which income is treated as paid) —
a
in paragraph (1) for “to (4) apply” substitute “applies”; and
b
omit paragraphs (3) and (4) .
3
In regulation 32(1) (calculation of weekly amount of income) omit “and regulation 31(3) (date on which income is treated as paid) ”.
4
In regulation 40(1) (calculation of income other than earnings) omit “and regulation 31(3) and (4) (date on which income is treated as paid) ”.
5
In Schedule 2 (applicable amounts) —
a
in paragraph 13A (enhanced disability premium), after sub-paragraph (1) insert–
1A
Where the condition in sub-paragraph (1) ceases to be satisfied because of the death of a child or young person, the condition is that the claimant is entitled to child benefit in respect of that person under section 145A of the Contributions and Benefits Act (entitlement after death of child or qualifying young person).
; and
b
in paragraph 14 (disabled child premium)–
i
after sub-paragraph (1)(a) omit “or”,
ii
after sub-paragraph (1)(b) insert–
; or
c
a child or young person in respect of whom section 145A of the Contributions and Benefits Act (entitlement after death of child or qualifying young person) applies for the purposes of entitlement to child benefit but only for the period prescribed under that section, and in respect of whom a disabled child premium was included in the claimant’s applicable amount immediately before the death of that child or young person, or ceased to be included in the claimant’s applicable amount because of that child or young person’s death.
, and
iii
in sub-paragraph (2), after “condition” insert “in sub-paragraph (1)(a) or (b)”.
6
In Schedule 3 (housing costs) —
a
in paragraphs 4(4A)(b) , 14(4)(b) and 14(12)(c) after “income” insert “equal to or”;
b
in paragraph 14(1) omit “Subject to sub-paragraph (2),”; and
c
omit paragraph 14(2).
Amendments to the Social Security (Claims and Payments) Regulations 1987
4
1
The Social Security (Claims and Payments) Regulations 1987 are amended as follows.
2
In Schedule 9 (deductions from benefit and direct payment to third parties) —
a
in the definition of “specified benefit” in paragraph 1(1) omit “but does not include any sum payable by way of child maintenance bonus in accordance with section 10 of the Child Support Act 1995 and the Child Maintenance Bonus Regulations 1996;”; and
b
in paragraph 5 (service charges for fuel, and rent not falling within paragraph 2(1)(a)), for sub-paragraph (2) substitute —
2
For the purposes of sub-paragraph (1) arrears of rent do not include any amount which falls to be deducted under regulation 74 of the Housing Benefit Regulations (non-dependant deductions) or, as the case may be, regulation 55 of the Housing Benefit (State Pension Credit) Regulations (non-dependant deductions) when assessing a person’s housing benefit.
.
3
In the definition of “relevant benefits” in paragraph 1 of Schedule 9A (deductions of mortgage interest from benefit and payment to qualifying lenders), omit “but does not include any sum payable by way of child maintenance bonus in accordance with section 10 of the Child Support Act 1995 and the Child Maintenance Bonus Regulations 1996;”.
Amendments to the Social Security (Incapacity Benefit) Regulations 1994
5
For regulation 8 of the Social Security (Incapacity Benefit) Regulations 1994 (limit of earnings from councillor’s allowance) substitute —
8
1
For the purpose of section 30E(1) of the Contributions and Benefits Act (incapacity benefit: reduction for councillor’s allowance) the prescribed amount is 16 x National Minimum Wage, subject to paragraph (3).
2
In this regulation “National Minimum Wage” means the rate of the national minimum wage specified in regulation 11 of the National Minimum Wage Regulations 1999 (rate of the national minimum wage).
3
Where the amount determined by the calculation in paragraph (1) would, but for this paragraph, include an amount of–
a
less than 50p, that amount shall be rounded up to the nearest 50p; or
b
less than £1 but more than 50p, that amount shall be rounded up to the nearest £1.
.
Amendments to the Social Security (Incapacity for Work) (General) Regulations 1995
6
1
The Social Security (Incapacity for Work) (General) Regulations 1995 are amended as follows.
2
In regulation 2(1) (interpretation), in the definition of “medical evidence”, after “medical evidence” insert “, except in regulation 16A,”.
3
In regulation 16A (persons to be treated as capable of work at the end of the period covered by medical evidence) —
a
the existing provision becomes paragraph (1);
b
in paragraph (1)(a) omit “in accordance with regulation 28(2)(a)”; and
c
after paragraph (1) add —
2
In this regulation “medical evidence” means evidence provided under regulation 2 or 5 of the Social Security (Medical Evidence) Regulations 1976 .
.
4
In regulation 17 (exempt work) —
a
in paragraphs (3) and (4), for “£95.00” substitute “16 x National Minimum Wage, subject to paragraph (10),”;
b
in paragraph (8) after the definition of “less than 16 hours a week” insert —
“National Minimum Wage” means the rate of the national minimum wage specified in regulation 11 of the National Minimum Wage Regulations 1999 (rate of the national minimum wage);
; and
c
after paragraph (9) add —
10
Where the amount determined by the calculation in paragraphs (3) and (4) would, but for this paragraph, include an amount of–
a
less than 50p, that amount shall be rounded up to the nearest 50p; or
b
less than £1 but more than 50p, that amount shall be rounded up to the nearest £1.
.
Amendments to the Jobseeker’s Allowance Regulations 1996
7
1
The Jobseeker’s Allowance Regulations 1996 are amended as follows.
2
In regulation 55(4) (short periods of sickness) omit “12 weeks of an entitlement of his to employment and support allowance or”.
3
In regulation 96 (date on which income is treated as paid) —
a
in paragraph (1) for “to (4) apply” substitute “applies”; and
b
omit paragraphs (3) and (4) .
4
In regulation 97(1) (calculation of weekly amount of income) omit “and regulation 96(3) (date on which income is treated as paid) ”.
5
In regulation 103(1) (calculation of income other than earnings) omit “and regulation 96(3) and (4) (date on which income is treated as paid) ”.
6
In Schedule 1 (applicable amounts) —
a
in paragraph 15A (enhanced disability premium), after sub-paragraph (1) insert–
1A
Where the condition in sub-paragraph (1) ceases to be satisfied because of the death of a child or young person, the condition is that the claimant is entitled to child benefit in respect of that person under section 145A of the Benefits Act (entitlement after death of child or qualifying young person).
; and
b
in paragraph 16 (disabled child premium)–
i
after sub-paragraph (1)(a) omit “or”,
ii
after sub-paragraph (1)(b) insert–
; or
c
a child or young person in respect of whom section 145A of the Benefits Act (entitlement after death of child or qualifying young person) applies for the purposes of entitlement to child benefit but only for the period prescribed under that section, and in respect of whom a disabled child premium was included in the claimant’s applicable amount immediately before the death of that child or young person, or ceased to be included in the claimant’s applicable amount because of that child or young person’s death.
, and
iii
in sub-paragraph (2), after “condition” insert “in sub-paragraph (1)(a) or (b)”.
7
In Schedule 2 (housing costs) —
a
in paragraph 13(1) for “sub-paragraphs (2) and (2A)” substitute “sub-paragraph (2A)”;
b
omit paragraph 13(2); and
c
in paragraph 13(5)(b) after “income” insert “equal to or”.
Amendments to the Social Security and Child Support (Decisions and Appeals) Regulations 1999
8
In Schedule 3B to the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (date on which change of circumstances takes effect where claimant entitled to state pension credit) —
a
for paragraph 1(b) substitute–
b
except as provided in the following paragraphs–
i
where state pension credit is paid in advance, from the day that change occurs or is expected to occur if either of those days is the first day of a benefit week but if it is not from the next following such day;
ii
where state pension credit is paid in arrears, from the first day of the benefit week in which that change occurs or is expected to occur.
;
b
in paragraph 2, after “has changed” insert “or that the claimant becomes entitled to disability living allowance (middle or higher rate care component) or to attendance allowance”;
c
in paragraph 7 , for “paragraphs 9 and 10” substitute “paragraph 8A”; and
d
for paragraphs 9 and 10 substitute–
8A
Where the relevant change of circumstances is the death of the claimant, the superseding decision shall take effect on the first day of the benefit week next following the date of death.
.
Amendments to the Social Security (Work-focused Interviews for Lone Parents) and Miscellaneous Amendments Regulations 2000
9
1
The Social Security (Work-focused Interviews for Lone Parents) and Miscellaneous Amendments Regulations 2000 are amended as follows.
2
In regulation 2 (general requirement for lone parents claiming or entitled to income support to take part in an interview) —
a
for paragraph (1), substitute —
1
Subject to this regulation and regulations 2ZA , 2A and 4 to 6, a lone parent who falls within any of paragraphs (2) to (4) is required to take part in an interview.
; and
b
for paragraph (8), substitute —
8
In this regulation, “relevant interview” means an interview under these Regulations in relation to the lone parent’s current award of income support.
.
3
In regulation 2A(3), omit “or 2B”.
4
Omit —
a
regulation 2B (requirement for certain lone parents in certain areas to take part in an interview);
b
regulation 4(4) (circumstances where requirement to take part in an interview does not apply); and
c
Schedule 3 (areas for the purposes of regulation 2B).
5
In regulation 4(3) (circumstances where requirement to take part in an interview does not apply), for “2ZA, 2A and 2B” substitute “2ZA and 2A”.
6
In regulation 5(2) (deferment of requirement to take part in an interview), for “2, 2ZA, 2A and 2B” substitute “2, 2ZA and 2A”.
7
In regulation 6(2)(a) (waiver), for “2, 2ZA, 2A and 2B” substitute “2, 2ZA and 2A”.
8
In regulation 7(3)(b) (consequences of a failure to take part in an interview), for “2(3) or (4), 2ZA, 2A or 2B” substitute “2(3) or (4), 2ZA or 2A”.
Amendments to the Social Security (Jobcentre Plus Interviews) Regulations 2002
10
Regulation 4 of the Social Security (Jobcentre Plus Interviews) Regulations 2002 (continuing entitlement to specified benefit dependent on an interview) is amended as follows —
a
at the end of paragraph (2)(i) insert “or”;
b
omit paragraph (2)(iii) and (iv); and
c
for paragraph (5A) substitute —
5A
In this regulation, “relevant interview” means an interview under these Regulations in relation to the lone parent’s current award of the specified benefit.
.
Amendments to the Social Security (Working Tax Credit and Child Tax Credit) (Consequential Amendments) Regulations 2003
11
The Social Security (Working Tax Credit and Child Tax Credit) (Consequential Amendments) Regulations 2003 are amended as follows —
a
in regulation 7 (income support - transitional arrangements) omit paragraphs (6) and (7); and
b
in regulation 8 (jobseeker’s allowance - transitional arrangements) omit paragraphs (5) and (6).
Amendments to the Housing Benefit Regulations 2006
12
1
The Housing Benefit Regulations 2006 are amended as follows.
2
In paragraph 15 of Schedule 3 (enhanced disability premium) —
a
after sub-paragraph (1) insert–
1A
Where the condition in sub-paragraph (1) ceases to be satisfied because of the death of a child or young person, the condition is that the claimant is entitled to child benefit in respect of that person under section 145A of the Act (entitlement to child benefit after death of child or qualifying young person).
; and
b
in sub-paragraph (2), for “An enhanced disability premium shall not be applicable in respect of” substitute “The condition is not satisfied if the person to whom sub-paragraph (1) refers is”.
3
In paragraph 16 of Schedule 3 (disabled child premium) for sub-paragraph (c) substitute —
c
is a child or young person in respect of whom section 145A of the Act (entitlement to child benefit after death of child or qualifying young person) applies for the purposes of entitlement to child benefit but only for the period prescribed under that section, and in respect of whom a disabled child premium was included in the claimant’s applicable amount immediately before the death of that child or young person, or ceased to be included in the claimant’s applicable amount because of that child or young person’s death.
.
4
Omit paragraph 48 of Schedule 6 (capital to be disregarded: child maintenance bonus).
Amendments to the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006
13
1
The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 are amended as follows.
2
In paragraph 7 of Schedule 3 (enhanced disability premium) —
a
the existing provision becomes sub-paragraph (1);
b
for “The condition” substitute “Subject to sub-paragraph (2), the condition”; and
c
after sub-paragraph (1) add–
2
Where the condition in sub-paragraph (1) ceases to be satisfied because of the death of a child or young person, the condition is that the claimant is entitled to child benefit in respect of that person under section 145A of the Act (entitlement after death of child or qualifying young person).
.
3
In paragraph 8 of Schedule 3 (disabled child premium) for sub-paragraph (c) substitute —
c
is a child or young person in respect of whom section 145A of the Act (entitlement after death of child or qualifying young person) applies for the purposes of entitlement to child benefit but only for the period prescribed under that section, and in respect of whom a disabled child premium was included in the claimant’s applicable amount immediately before the death of that child or young person, or ceased to be included in the claimant’s applicable amount because of that child or young person’s death.
.
Amendments to the Council Tax Benefit Regulations 2006
14
1
The Council Tax Benefit Regulations 2006 are amended as follows.
2
In paragraph 15 of Schedule 1 (enhanced disability premium) —
a
after sub-paragraph (1) insert–
1A
Where the condition in sub-paragraph (1) ceases to be satisfied because of the death of a child or young person, the condition is that the claimant is entitled to child benefit in respect of that person under section 145A of the Act (entitlement after death of child or qualifying young person).
; and
b
in sub-paragraph (2), for “An enhanced disability premium shall not be applicable in respect of” substitute “The condition is not satisfied if the person to whom sub-paragraph (1) refers is”.
3
In paragraph 16 of Schedule 1 (disabled child premium) for sub-paragraph (c) substitute —
c
is a child or young person in respect of whom section 145A of the Act (entitlement after death of child or qualifying young person) applies for the purposes of entitlement to child benefit but only for the period prescribed under that section, and in respect of whom a disabled child premium was included in the claimant’s applicable amount immediately before the death of that child or young person, or ceased to be included in the claimant’s applicable amount because of that child or young person’s death.
.
4
Omit paragraph 50 of Schedule 5 (capital to be disregarded: child maintenance bonus).
Amendments to the Council Tax Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006
15
1
The Council Tax Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 are amended as follows.
2
In paragraph 7 of Schedule 1 (enhanced disability premium) —
a
the existing provision becomes sub-paragraph (1);
b
for “The condition” substitute “Subject to sub-paragraph (2), the condition”; and
c
after sub-paragraph (1) add–
2
Where the condition in sub-paragraph (1) ceases to be satisfied because of the death of a child or young person, the condition is that the claimant is entitled to child benefit in respect of that person under section 145A of the Act (entitlement after death of child or qualifying young person).
.
3
In paragraph 8 of Schedule 1 (disabled child premium) for sub-paragraph (c) substitute —
c
is a child or young person in respect of whom section 145A of the Act (entitlement after death of child or qualifying young person) applies for the purposes of entitlement to child benefit but only for the period prescribed under that section, and in respect of whom a disabled child premium was included in the claimant’s applicable amount immediately before the death of that child or young person, or ceased to be included in the claimant’s applicable amount because of that child or young person’s death.
.
Amendments to the Employment and Support Allowance Regulations 2008
16
1
The Employment and Support Allowance Regulations 2008 are amended as follows.
2
In regulation 2(1) (interpretation) —
a
after the definition of “first contribution condition” insert —
“First-tier Tribunal” has the meaning given by section 3(1) of the Tribunals, Courts and Enforcement Act 2007 ;
;
b
in the definition of “medical evidence”, after “medical evidence” insert “, except in regulation 32A,”; and
c
after the definition of “mobility supplement” insert —
“National Minimum Wage” means the rate of the national minimum wage specified in regulation 11 of the National Minimum Wage Regulations 1999 (rate of the national minimum wage);
.
3
In regulation 30(3) (conditions for treating a claimant as having limited capability for work until a determination about limited capability for work has been made), for “an appeal tribunal constituted under Chapter 1 of Part 1 of the Social Security Act 1998” substitute “the First-tier Tribunal”.
4
In regulation 32A (claimants to be treated as not having limited capability for work at the end of the period covered by medical evidence) —
a
the existing provision becomes paragraph (1);
b
in paragraph (1)(a) omit “in accordance with regulation 30(2)(a)”; and
c
after paragraph (1) add–
2
In this regulation “medical evidence” means evidence provided under regulation 2 or 5 of the Medical Evidence Regulations.
.
5
In regulation 45 (exempt work) —
a
in paragraphs (3) and (4) for “£95.00” substitute “16 x National Minimum Wage, subject to paragraph (9A),”; and
b
after paragraph (9) insert —
9A
Where the amount determined by the calculation in paragraphs (3) and (4) would, but for this paragraph, include an amount of–
a
less than 50p, that amount shall be rounded up to the nearest 50p; or
b
less than £1 but more than 50p, that amount shall be rounded up to the nearest £1.
.
6
In regulation 76 (deductions for councillor’s allowance) —
a
in paragraph (1) for “£95.00” substitute “16 x National Minimum Wage, subject to paragraph (3)”; and
b
after paragraph (2) add —
3
Where the amount determined by the calculation in paragraph (1) would, but for this paragraph, include an amount of–
i
less than 50p, that amount shall be rounded up to the nearest 50p; or
ii
less than £1 but more than 50p, that amount shall be rounded up to the nearest £1.
.
7
In regulation 93 (date on which income is treated as paid) —
a
in paragraph (1) omit “or (3)”; and
b
omit paragraphs (3) and (4).
8
In regulation 104(1) (calculation of income other than earnings) omit “and regulation 93(3) and (4) (date on which income is treated as paid) ”.
9
In regulation 149(1) (linking rules-limited capability for work), after “employment and support allowance” add “until it is determined whether that beneficiary has, or is treated as having, limited capability for work following a limited capability for work assessment”.
10
In regulation 150 (linking rules-limited capability for work-related activity) after “employment and support allowance” add “until it is determined whether that beneficiary has, or is treated as having, limited capability for work-related activity in accordance with regulation 34 or 35”.
11
In Schedule 6 (housing costs) —
a
in paragraph 6(5)(b) after “income” insert “equal to or”;
b
in paragraph 15(1) omit “Subject to sub-paragraph (2),”;
c
omit paragraph 15(2); and
d
in paragraph 15(8) —
i
in paragraph (b) after “income” insert “equal to or”, and
ii
after paragraph (b) insert–
bb
an amount of contributory allowance payable in respect of a claimant under section 2 that is equal to, or exceeds, the applicable amount in the claimant’s case; or
.
12
In paragraphs 5, 6 and 7 of Schedule 7 (sums to be disregarded in the calculation of earnings), for “£95.00”, wherever it appears, substitute “16 x National Minimum Wage”.
13
In Schedule 8 (sums to be disregarded in the calculation of income other than earnings) in paragraph 7, for sub-paragraph (3) substitute —
3
Any increase in respect of a dependent child or dependent young person under section 80 or 90 of the Contributions and Benefits Act.
.
Signed by authority of the Secretary of State for Work and Pensions.
Freud
Parliamentary Under Secretary of State,
Department for Work and Pensions
5th March 2011


text:
Citation and commencement
1
These Regulations may be cited as the Money Laundering (Amendment No.2) Regulations 2011 and come into force on 31st March 2012.
Change of supervisory authority for Northern Ireland credit unions
2
The Money Laundering Regulations 2007 are amended as follows.
a
In regulation 23(1) —
i
after sub-paragraph (a)(v) insert —
vi
credit unions in Northern Ireland;
; and
ii
omit sub-paragraph (f)(i).
b
In the definition of “designated authority” in regulation 36 —
i
in paragraph (b), insert “and” after “the Commissioners;”; and
ii
omit paragraph (d), together with “and” immediately preceding it.
c
In the definition of “officer” in regulation 36 —
i
in paragraph (c), insert “or” after “the OFT ;”; and
ii
omit paragraph (e), together with “or” immediately preceding it.
Review
3
1
The Treasury must from time to time —
a
carry out a review of regulation 2,
b
set out the conclusions of the review in a report, and
c
publish the report.
2
The report must in particular —
a
set out the objectives intended to be achieved by the amendments made by regulation 2,
b
assess the extent to which those objectives are achieved, and
c
assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.
3
The first report under this regulation must be published before the end of the period of five years beginning with 31st March 2012 in conjunction with the Treasury’s report setting out the conclusions of its review under article 3 of the Financial Services and Markets Act 2000 (Exemption) (Amendment No 2) Order 2011 .
4
Reports under this regulation are afterwards to be published at intervals not exceeding five years.
Michael Fabricant
Angela Watkinson
Two of the Lords Commissioners of Her Majesty’s Treasury
23rd November 2011


text:
PART 1 Introductory and General Provisions
Citation, commencement and effect
1
1
These Regulations may be cited as the Investment Trust (Approved Company) (Tax) Regulations 2011 and come into force on 1 January 2012.
2
Subject to paragraph (3), these Regulations have effect in relation to accounting periods beginning on or after 1 January 2012.
3
Regulations 43, 45 and 46 have effect in relation to disposals made on or after 1 January 2012.
Structure of these Regulations
2
The structure of these Regulations is as follows —
This Part contains introductory and general provisions;
Part 2 contains the following provisions about investment trusts —
Chapter 1 deals with applications for approval as an investment trust,
Chapter 2 deals with cases where the eligibility conditions are treated as being met,
Chapter 3 deals with the requirements to be met by investment trusts whilst approved,
Chapter 4 deals with breaches of the requirements to be met by investment trusts and subsequent withdrawal of approval,
Chapter 5 deals with an approved company treating itself as not being an investment trust;
Part 3 contains provisions about transactions by investment trusts which are treated as entered into otherwise than in the course of a trade; and
Part 4 contains provisions about investment trusts having interests in offshore non-reporting funds and index tracking funds, and makes consequential provision.
Interpretation
3
1
In these Regulations —
“company tax return” has the same meaning as in paragraph 3(1) of Schedule 18 to the Finance Act 1998 ,
“ CTA 2009 ” means the Corporation Tax Act 2009 ,
“ CTA 2010 ” means the Corporation Tax Act 2010 ,
“the Offshore Funds Regulations ” means the Offshore Funds (Tax) Regulations 2009 ,
“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.
2
For the purposes of these Regulations the market value of any asset is to be determined in a like manner as it would be determined for the purposes of the Taxation of Chargeable Gains Act 1992 .
PART 2 Investment Trusts
CHAPTER 1
Application procedure
Interpretation
4
In this Part —
“the eligibility conditions” mean conditions A to C in section 1158 of CTA 2010,
“the income distribution requirement” has the meaning given in regulation 21(9).
Application for approval as an investment trust
5
1
A company may apply to the Commissioners for approval as an investment trust in accordance with this Chapter.
2
A company which makes such an application is referred to in this Chapter as “the applicant”.
Contents of application
6
1
An application under regulation 5 must include the particulars specified in this regulation.
2
The application must —
a
specify the date of the first day of an accounting period in respect of which the applicant seeks approval as an investment trust (“the specified date”),
b
contain a statement that the applicant meets, or is expected to meet, in respect of the accounting period referred to in sub-paragraph (a) —
i
the eligibility conditions, and
ii
the requirements of Chapter 3 of this Part,
c
contain an undertaking given in relation to the accounting period referred to in sub-paragraph (a) and each subsequent accounting period in respect of which it is or expects to be an investment trust, that the applicant will meet —
i
the eligibility conditions, and
ii
the requirements of Chapter 3 of this Part,
d
include a copy of the applicant’s current published investment policy, and
e
provide evidence to show that the shares making up the applicant’s ordinary share capital (or, if there are such shares of more than one class, those of each class) are admitted to trading on a regulated market .
This regulation is subject to regulations 7, 8, 9 and 13.
Contents of application: accounting period not commenced at time of application
7
1
This regulation applies if at the time the application is made the applicant has not commenced an accounting period.
2
If this regulation applies the applicant must —
a
specify a provisional date for the purposes of regulation 6(2)(a), and
b
where a provisional date is specified, as soon as reasonably practicable, confirm in writing to the Commissioners the date of the first day of the accounting period in respect of which the applicant seeks approval as an investment trust.
Contents of application: shares not admitted to trading at time of application
8
1
This regulation applies if at the time the application is made the shares making up the applicant’s ordinary share capital (or, if there are such shares of more than one class, those of each class) are not admitted to trading on a regulated market.
2
If this regulation applies, the application —
a
for the purposes of regulation 6(2)(d), may include a copy of the applicant’s prospectus instead of the current published investment policy, and
b
must explain how the applicant will be in a position to comply with condition B in section 1158(3) of CTA 2010 by the specified date.
3
The applicant must provide evidence to the Commissioners that the shares making up the applicant’s ordinary share capital (or, if there are such shares of more than one class, those of each class) are admitted to trading on a regulated market —
a
before the end of a period of 60 days beginning with the date on which the shares were so admitted, or
b
by such other date as the Commissioners may agree.
Form, timing and withdrawal of application
9
1
An application must be made in writing to the Commissioners.
2
The application must be made to the Commissioners before the end of the period of 90 days beginning with the last day of the first accounting period for which approval is sought.
3
The applicant may withdraw the application at any time during the period beginning with the day on which the application is made and ending 28 days after the day on which the Commissioners give notice under regulation 10 accepting the application.
Response by Commissioners to application
10
1
Within 28 days beginning with the date on which the application is made, the Commissioners must give notice in writing to the applicant —
a
accepting the application,
b
rejecting the application, or
c
asking for further information in order to consider the application.
2
The Commissioners must not accept an application if any particular or information mentioned in regulation 6, 7 or 8 is not supplied.
3
Paragraph (4) applies if —
a
the Commissioners have given a notice under paragraph (1)(c), and
b
the applicant provides the further information within the period of 28 days beginning with the day on which the Commissioners ask for the further information, or within such longer period as may be agreed by the Commissioners.
4
Within 28 days beginning with the day on which they receive the further information, the Commissioners must give notice to the applicant —
a
accepting the application, or
b
rejecting the application.
5
If the Commissioners reject the application, the notice given to the applicant under paragraph (1)(b) or (4)(b) must contain a statement of the reason for which the application was rejected.
Appeal against rejection of the application
11
1
If the Commissioners reject an application, the applicant may appeal.
2
The notice of appeal must be given to the Commissioners within a period of 42 days beginning with the day on which the notice rejecting the application is given.
3
On an appeal, the tribunal may uphold or quash the rejection of the application.
4
If the tribunal quashes the rejection of the application, these Regulations apply as if the Commissioners had accepted the application in the form in which it was considered by the tribunal.
Effect of acceptance of application
12
If the Commissioners accept (or are treated as accepting) an application, the applicant is approved as an investment trust —
a
for the accounting period commencing on the specified date (or commencing on such later date as may be confirmed in accordance with regulation 7(2)(b)), and
b
for each subsequent accounting period,
but this is subject to regulations 13 and 25 to 31.
Acceptance of application conditional on receipt of specified information
13
1
An acceptance by the Commissioners of an application is conditional on the provision of any information or particulars required by regulations 7(2)(b) and 8(3).
2
If the applicant does not provide any such information or particulars, the application shall be treated as if it had not been made and the company treated as if it had not been an investment trust for any of the period to which the application mentioned in paragraph (1) related.
CHAPTER 2
Cases where eligibility conditions treated as being met
Delay in admission of company’s ordinary share capital to trading on a regulated market
14
1
Paragraph (3) applies if at the date on which the application under regulation 5 is made the applicant —
a
has commenced procedures to obtain admission of the shares making up its ordinary share capital (or, if there are such shares of more than one class, those of each class) to trading on a regulated market but has not obtained admission, or
b
has given a commitment in its prospectus to commence such procedures but has not started those procedures.
2
Paragraph (3) also applies if a company which has been approved as an investment trust issues shares of a class (“the new shares”) which is different from any of those which make up its ordinary share capital.
3
Condition B in section 1158(3) of CTA 2010 is to be treated as met for the period of 60 days beginning with —
a
in the case of paragraph (1), the date of the application, or
b
in the case of paragraph (2), the date on which the new shares were issued.
Winding up of company approved as investment trust
15
1
Paragraph (2) applies if —
a
a company is being wound up,
b
the company was approved as an investment trust in respect of the accounting period which ended immediately before the winding up started (see section 12 of CTA 2009),
c
the company satisfied the eligibility conditions in respect of the accounting period referred to in sub-paragraph (b), and
d
subject to paragraph (4), the company makes no new investments during the realisation period.
2
Conditions A and B in section 1158 of CTA 2010 are to be treated as met in respect of the realisation period.
This paragraph is subject to regulation 16.
3
In paragraphs (1) and (2) the “realisation period” is the period beginning with the date on which the winding up started and ending with the date on which the winding up is completed.
4
For the purposes of paragraph (1)(d) —
a
the placing on deposit of the proceeds of the disposal of assets of the company, or
b
the purchase of gilts with the proceeds of the disposal of assets of the company,
shall not be treated as the making of a new investment by the company.
5
In this regulation and regulation 16, references to “a company being wound up” and “winding up” are to be construed in accordance with section 12 of CTA 2009.
Winding up of company approved as investment trust – further conditions
16
1
Paragraph (2) of regulation 15 shall only apply if paragraphs (2) to (4) of this regulation are met.
2
The Commissioners must be notified in writing that the company is being wound up.
3
The notice under paragraph (2) must be given within one year beginning with the date on which the winding up started.
4
The Commissioners must be satisfied that the realisation period referred to in regulation 15 has not been unreasonably prolonged.
CHAPTER 3
Investment trust: requirements to be met whilst approved
Investment trust to comply with requirements of this Chapter
17
A company must comply with the provisions of this Chapter in relation to each accounting period in respect of which it is approved as an investment trust.
Investment trust must not be a close company
18
1
An investment trust must not be a close company at any time in an accounting period.
2
See section 439 of CTA 2010 for the definition of “close company”.
The income distribution requirement
19
1
An investment trust must not retain in respect of an accounting period an amount which is greater than 15% of its income for the accounting period.
2
The investment trust must distribute as a dividend the amount required to comply with paragraph (1) before the filing date for the investment trust’s company tax return for the accounting period.
3
Where the investment trust company’s tax return has been amended as a result of a notice served under paragraph 15 or 34 of Schedule 18 to the Finance Act 1998 , any further distribution that is required by virtue of the amendment must be made before the end of the period of 180 days beginning with the date of the amendment.
4
In this regulation and regulation 23, “filing date” has the meaning given in paragraph 14 of Schedule 18 to the Finance Act 1998.
5
This regulation is subject to regulations 21 and 22.
Calculation of income
20
1
Paragraphs (2) and (3) apply for the purposes of regulation 19(1) in determining the income of the investment trust for an accounting period.
2
The amounts to be brought into account under Part 5 of CTA 2009 in respect of the investment trust’s loan relationships are to be determined without reference to any debtor relationships of the investment trust.
3
Income treated as arising under regulation 18(1) (the charge to tax: further provisions) of the Offshore Funds Regulations is to be ignored.
The income distribution requirement: reduction in amount of income permitted to be retained
21
1
This regulation applies where conditions A to C are met.
2
Condition A is that the investment trust is a participant in an offshore reporting fund within the meaning of regulation 50 (meaning of “reporting fund”) of the Offshore Funds Regulations.
3
Condition B is that there is an amount which falls to be reported to the investment trust in accordance with regulation 92(1)(b) (contents of a report to participants: non-transparent funds) of the Offshore Funds Regulations .
4
Condition C is that the amount referred to in condition B is accounted for by the investment trust through the capital column of the income statement in accordance with the AIC Statement of Recommended Practice, or would have been so accounted for if that Statement had been applied correctly.
5
Where this regulation applies the amount which the investment trust may retain in accordance with regulation 19(1) is reduced by an amount equal to 85% of the amount referred to in condition B.
6
If the application of paragraph (5) has the effect that the sum which an investment trust is permitted to retain (“the retainable amount”) is calculated to be less than zero, the investment trust must distribute as a dividend a further sum which is equal to the difference between the retainable amount and zero.
7
The further distribution mentioned in paragraph (6) must be made in relation to the accounting period in which the fund distribution date for the offshore reporting fund in question falls.
8
In this regulation —
a
“fund distribution date” has the meaning given in regulation 94 (reported income: general provisions) of the Offshore Funds Regulations , and
b
“AIC Statement of Recommended Practice” means the Statement of Recommended Practice relating to Investment Trust Companies, issued by the Association of Investment Trust Companies in January 2009 .
9
The distribution required under this regulation together with the distribution required under regulation 19 comprise “the income distribution requirement”.
10
This regulation is subject to regulation 22.
The income distribution requirement: exceptions
22
1
Regulations 19 and 21 do not apply in relation to an accounting period if the amount that the investment trust would be required to distribute in accordance with those regulations, taken together, would be less than £30,000.
2
Regulations 19 and 21 do not apply in relation to an accounting period if —
a
by virtue of a restriction imposed by law, the investment trust is required to retain in respect of the accounting period an amount of income that exceeds 15% of its income, and
b
either —
i
the amount of income that the investment trust retains in respect of the accounting period does not exceed the amount of income that it is required to retain in respect of the period by virtue of a restriction imposed by law, or
ii
if there is such an excess, the amount of the excess plus the amount of any income that the investment trust distributes in respect of the period is less than £30,000.
3
If the accounting period mentioned in paragraphs (1) and (2) is shorter than 12 months, the amount of £30,000 mentioned in paragraphs (1) and (2)(b)(ii) is proportionately reduced.
Requirement to notify Commissioners of revised investment policy
23
1
An investment trust must notify the Commissioners if it revises its published investment policy.
2
The investment trust must provide the Commissioners with a copy of any revised investment policy before the filing date for its company tax return for the accounting period in which the investment policy was revised.
Requirement to notify Commissioners of breach
24
1
An investment trust must give notice in accordance with paragraph (2) if it has breached —
a
any of the eligibility conditions (see regulation 4), or
b
any other requirement of these Regulations (apart from this regulation).
2
The notice must —
a
be given in writing to the Commissioners as soon as reasonably practicable after the investment trust becomes aware of any breach referred to in paragraph (1), and
b
specify the steps, if any, that have been taken, or are to be taken, to correct the breach.
CHAPTER 4
Breach of the Regulations and withdrawal of approval
Types of breach
25
1
This Chapter applies if an investment trust is in breach of a requirement imposed by these Regulations.
2
A breach is —
a
a minor breach, or
b
a serious breach.
3
For the purposes of these Regulations, a breach is a “serious breach” if it is —
a
a breach specified as a serious breach in this Chapter, or
b
a breach which is not a minor breach.
4
For the purposes of these Regulations, a breach is a “minor breach” if it is a breach (other than a breach specified as a serious breach in this Chapter) —
a
for which there is a reasonable excuse, and
b
which is inadvertent and corrected as soon as reasonably practicable.
5
For the purposes of this Chapter a minor breach is not regarded as a breach if the investment trust —
a
notifies the Commissioners of the breach in accordance with regulation 24, and
b
corrects the breach as soon as reasonably practicable without any intervention by the Commissioners.
6
For the purposes of this regulation there is an “intervention by the Commissioners” in relation to an investment trust if the Commissioners ask it to provide them with information relating to a requirement imposed by Chapter 3.
This paragraph is subject to paragraph (7).
7
There is no intervention by the Commissioners in relation to an investment trust if —
a
the investment trust notifies the Commissioners of the breach in accordance with regulation 24,
b
the investment trust complies with regulation 25(5), and
c
the Commissioners request the investment trust to provide them with information so that they may determine whether the breach has been corrected.
Serious breach
26
For the purposes of this Chapter a breach of regulation 18 (investment trust must not be a close company) is a serious breach.
Multiple breaches
27
1
Subject to the following provisions of this Chapter, if an investment trust is in breach of a requirement imposed by these Regulations, and the breach is a minor breach, it continues to be treated as approved as an investment trust.
2
If paragraph (1) applies —
a
on three separate occasions in a period of ten years beginning with the first day of the accounting period in which the first breach occurs, and
b
in relation to the same requirement,
the third breach is a serious breach.
3
If paragraph (1) applies —
a
on four separate occasions in a period of ten years beginning with the first day of the accounting period in which the first breach occurs, and
b
in relation to more than one of the requirements,
the fourth breach is a serious breach.
4
If a single event results in more than one minor breach within a single accounting period there is only one minor breach in that period in relation to that event for the purposes of this Chapter.
Breach of the income distribution requirement
28
1
Subject to paragraph (4), there is a breach of the income distribution requirement if —
a
there is a difference between —
i
the amount that the investment trust is required to distribute in relation to an accounting period in accordance with regulations 19 and 21, and
ii
the amount which the investment trust distributed in relation to that accounting period, and
b
the amount referred to in paragraph (ii) is less than the amount referred to in paragraph (i).
2
If the difference between the two amounts specified in paragraph (1) is greater than 1% but less than or equal to 5% of the income of the investment trust for the accounting period then, subject to paragraph (5), the breach is a minor breach.
3
If the difference between the two amounts specified in paragraph (1) is greater than 5% of the income of the investment trust for the accounting period, the breach is a serious breach.
4
If the difference between the two amounts specified in paragraph (1) is less than or equal to 1% of the income of the investment trust for the accounting period then, subject to paragraph (5), the investment trust is to be treated as not having breached the income distribution requirement.
5
Paragraph (4) only applies if the failure to comply with the income distribution requirement was inadvertent.
6
For the purpose of this regulation, the income of the investment trust includes income that falls to be reported to it in accordance with regulation 92(1)(b) (contents of report to participants: non-transparent funds) of the Offshore Funds Regulations.
Consequences of serious breaches
29
1
This regulation applies if conditions A and B are met.
2
Condition A is that —
a
the investment trust is in breach of a requirement imposed by these Regulations, and
b
the breach is a serious breach.
3
Condition B is that the Commissioners give notice in writing to the investment trust —
a
stating that the investment trust is in breach of a requirement imposed by these Regulations and that the breach is a serious breach, and
b
specifying the serious breach.
4
The investment trust is to be treated as a company which has not been approved as an investment trust for the accounting period in which the serious breach occurred (or, if there is more than one serious breach, the first of them) and, subject to paragraph (5), for all subsequent accounting periods.
5
A company to which this regulation applies may make an application under regulation 5 in respect of any accounting period subsequent to the accounting period in which the serious breach occurred.
Breach of the eligibility conditions
30
1
This regulation applies if an investment trust is in breach of any of the eligibility conditions.
2
The investment trust is to be treated as a company which has not been approved as an investment trust for the accounting period in which the breach of the eligibility condition occurred (or, if there is more than one breach, the first of them) and, subject to paragraph (3), for all subsequent accounting periods.
3
A company to which this regulation applies may make an application under regulation 5 in respect of any accounting period subsequent to the accounting period in which the breach of an eligibility condition occurred.
CHAPTER 5
Approved company treating itself as not being an investment trust
Company tax return submitted on basis that company is not an investment trust
31
1
This regulation applies if —
a
a company (apart from this regulation) is approved as an investment trust in respect of an accounting period,
b
the company makes a company tax return for that period, and
c
the self-assessment of the amount of tax which is payable by it included in the return is made on the basis that the company is not an investment trust with respect to that period.
2
If this regulation applies the company is treated as not having been approved as an investment trust for the accounting period referred to in paragraph (1) with effect from the first day of that period and, subject to paragraph (3), for all subsequent accounting periods.
3
A company to which this regulation applies may make an application under regulation 5 in respect of any accounting period subsequent to the accounting period to which the company tax return relates.
PART 3 Transactions to be treated as entered into otherwise than in the course of a trade
Treatment of transactions carried out by investment trusts
32
1
This regulation applies if an investment trust carries out an investment transaction in an accounting period.
2
The investment transaction is treated as a transaction entered into otherwise than in the course of a trade for the purposes of the Corporation Tax Acts.
Meaning of “investment transaction”
33
For the purposes of this Part an investment transaction means —
a
any transaction in stocks and shares,
b
any transaction in a relevant contract (see regulations 34 to 40),
c
any transaction which results in an investment trust becoming a party to a loan relationship or a related transaction in respect of a loan relationship (see regulation 39),
d
any transaction in units in a collective investment scheme (see regulation 40),
e
any transaction in securities of any description not falling within paragraphs (a) to (d),
f
any transaction consisting in the buying or selling of any foreign currency, or
g
any transaction in a carbon emission trading product (see regulation 41).
Meaning of “relevant contract”
34
1
For the purposes of regulation 33(b) a relevant contract is —
a
an option,
b
a future, or
c
a contract for differences.
2
For the purposes of this regulation an option, a future or a contract for differences which relates to land will only be a relevant contract if the option, future or contract for differences uses an index referred to in regulation 38(1)(b) and the index is —
a
publicly accessible,
b
comprised of a significant number of properties, and
c
not maintained by —
i
the investment trust,
ii
the manager of the investment trust, or
iii
a person connected with the investment trust or the manager of the investment trust.
3
For the purposes of this regulation —
a
sections 993 and 994 of the Income Tax Act 2007 (connected persons) apply where the manager is a person other than a company, and
b
sections 1122 and 1123 of CTA 2010 (connected persons) apply in the case of an investment trust or where the manager is a person which is a company.
Meaning of “relevant contract”: options
35
1
For the purposes of regulation 34(1)(a) an “option” includes an instrument which entitles the holder to subscribe for shares in a company or assets representing a loan relationship of a company, and for these purposes it is immaterial whether the shares or assets to which the instrument relates exist or are identifiable.
2
For the purposes of paragraph (1) the reference to a loan relationship of a company is to be construed in accordance with regulation 39 but with references in that regulation to “investment trust” treated as references to “company”.
Meaning of “relevant contract”: futures
36
1
For the purposes of regulation 34(1)(b) a “future” is a contract for the sale of property under which delivery is to be made —
a
at a future date agreed when the contract is made, and
b
at a price so agreed.
2
For the purposes of paragraph (1)(b) a price is taken to be agreed when the contract is made —
a
notwithstanding that the price is left to be determined by reference to the price at which a contract is to be entered into on a market or exchange or could be entered into at a time and place specified in the contract, or
b
in a case where the contract is expressed to be by reference to a standard lot and quality, notwithstanding that provision is made for a variation in the price to take account of any variation in quantity or quality on delivery.
Options and futures: further provisions
37
1
For the purposes of regulations 35 and 36 references to an option or a future do not include reference to a contract the terms of which provide —
a
that, after setting off their obligations to each other under the contract, a cash payment is to be made by one party to the other in respect of the excess, if any, and do not provide for the delivery of any property,
b
that each party is liable to make to the other party a cash payment in respect of all that party’s obligations to the other under the contract and do not provide for the delivery of any property, or
c
for the delivery of any property other than property a transaction in which would fall within any of the regulations in this Part where the property is delivered.
2
Nothing in paragraph (1) has effect to exclude, from references to an option or a future, an option or future whose underlying subject matter is currency.
3
In paragraph (2) “underlying subject matter” means —
a
in relation to an option, the property which would fall to be delivered if the option were exercised, and
b
in relation to a future, the property which, if the future were to run to delivery, would fall to be delivered at the date and price agreed when the contract is made.
Meaning of “relevant contract”: contracts for difference
38
1
For the purposes of regulation 34(1)(c) a “contract for differences” is a contract the purpose or pretended purpose of which is to make a profit or avoid a loss by reference to fluctuations in —
a
the value or price of property described in the contract, or
b
an index or other factor designated in the contract.
2
But none of the following is a contract for differences —
a
a future,
b
an option,
c
a contract of insurance,
d
a contract effected in the course of capital redemption business,
e
a contract of indemnity,
f
a guarantee,
g
a warranty,
h
a loan relationship.
3
For the purposes of paragraph (2) —
“capital redemption business” means any business of a company carrying on insurance business in so far as it consists of the effecting on the basis of actuarial calculations, and the carrying out, of contracts under which, in return for one or more fixed payments, a sum or series of sums of a specified amount become payable at a future time or over a period,
“loan relationship” is to be construed in accordance with regulation 39 but with references to “investment trust” in that regulation being construed as references to “company”.
4
For the purposes of paragraph (1)(b) an index or factor may be determined by reference to any matter and, for these purposes, a numerical value may be attributed to any variation in a matter.
Interpretation of regulation 33(c)
39
1
For the purposes of regulation 33(c) an investment trust has a loan relationship where the investment trust stands (whether by reference to a security or otherwise) in the position of a creditor or debtor as respects any money debt and either —
a
that debt is one arising from a transaction for the lending of money, or
b
that debt is not one which arose from a transaction for the lending of money but is one —
i
on which interest is payable to or by the investment trust,
ii
in relation to which the exchange gains or losses arise to the investment trust, or
iii
as respects which the conditions in paragraph (2) are satisfied.
2
The conditions mentioned in paragraph (1)(b)(iii) are that —
a
the investment trust stands in the position of creditor in relation to the money debt, and
b
the money debt is one from which a discount (whether of an income or capital nature) arises to the investment trust.
3
In this regulation “exchange gains or losses” means profits or gains or losses which arise as a result of comparing at different times the expression in one currency of the whole or some part of the valuation put by the investment trust in another currency on an asset or liability of the investment trust.
4
For the purposes of this regulation a “money debt” is a debt which is, or has at any time been, one that falls, or that may at the choice of the creditor or of the debtor, fall to be settled —
a
by the payment of money,
b
by the transfer of a right to settlement under a debt which is itself a money debt, or
c
by the issue or transfer of shares in any company,
disregarding any other alternative exercisable by either party.
5
Subject to paragraph (6), if an instrument is issued by any person for the purpose of representing security for, or the rights of a creditor in respect of, any money debt, then (whatever the circumstances of the issue of the instrument) that debt shall be taken for the purposes of this regulation to be a debt arising from a transaction for the lending of money.
6
For the purposes of this regulation a debt does not arise from a transaction for the lending of money to the extent that it is a debt arising from rights conferred by shares in a company.
7
For the purposes of this regulation, so far as relating to exchange gains and losses, any currency held by the investment trust shall be treated as a money debt.
8
For the purpose of this regulation “money” includes money expressed in a currency other than sterling.
9
For the purposes of regulation 33(c) a “related transaction” in relation to a loan relationship means any disposal or acquisition (in whole or in part) of rights or liabilities under that relationship.
Meaning of “units in a collective investment scheme”
40
1
For the purposes of regulation 33(d) —
“collective investment scheme” has the meaning given by section 235 of the Financial Services and Markets Act 2000 ,
“units” means the rights or interests (however described) of the investors in a collective investment scheme.
2
In paragraph (1) an “investor”, in relation to a collective investment scheme, means a beneficial owner of units in the scheme, except where the units are held on trust (other than a bare trust) or are comprised in the estate of a deceased person, and in such a case the investor, in relation to the scheme, means the trustees of the trust or, as the case may be, the deceased’s personal representatives.
Meaning of “transaction in a carbon emission trading product”
41
1
For the purposes of regulation 33(g) a “transaction in a carbon emission trading product” means a transaction —
a
in Community tradable emissions allowances, or
b
in transferable units issued pursuant to the Kyoto Protocol,
which does not otherwise fall within any other paragraph of regulation 33.
2
For the purposes of this regulation —
“Community tradable emissions allowances” means transferable allowances which relate to the making of emissions of greenhouse gases, and are allocated as part of a system made for the purpose of implementing any Community obligation of the United Kingdom relating to such emissions,
“the Kyoto Protocol” means the Kyoto Protocol to the United Nations Framework Convention on Climate Change signed at Kyoto on 11th December 1997,
“units” includes assigned amount units, certified emission reductions, emission reduction units and removal units.
PART 4 Investment trust having an interest in offshore non-reporting funds and index tracking funds
Interests in offshore non-reporting funds: general
42
1
Regulation 43 applies if —
a
an investment trust disposes of an asset which is an interest in a non-reporting fund (“the asset”), and
b
the conditions in paragraph (2) are satisfied for the period starting with the date on which the investment trust acquired the asset and ending with the day of the disposal.
2
The conditions are that —
a
the investment trust has access to the accounts of the non-reporting fund,
b
the investment trust had sufficient information about the non-reporting fund referred to in paragraph (1)(a) to enable it to prepare computations of reportable income for the non-reporting fund for every accounting period which, if the non-reporting fund were a reporting fund, would be a reporting period ending within the period mentioned in paragraph (1)(b),
c
the investment trust has prepared such computations, and
d
any excess of the investment trust’s share of the reportable income of the non-reporting fund over the investment trust’s share of the distributions made by the non-reporting fund is included in the amount available for distribution by the investment trust for each accounting period of the investment trust which falls within the period mentioned in paragraph (1)(b).
3
An investment trust has an interest in a non-reporting fund if and to the extent that it has an interest in such a fund for the purposes of the Offshore Funds Regulations.
4
For the purposes of the computations mentioned in paragraph (2)(b), regulation 80 (treatment of investment transactions carried out by diversely owned funds) of the Offshore Funds Regulations applies if (and only if) the non-reporting fund is a UCITS fund.
5
In this regulation, “UCITS fund” has the same meaning as in regulation 12 (general interpretation) of the Offshore Funds Regulations and “reporting period” has the same meaning as in regulation 91 (meaning of “reporting period”) of those Regulations.
Treatment of disposal of interest in non-reporting fund
43
No tax shall be charged on the investment trust under regulation 17 (the charge to tax) of the Offshore Funds Regulations on the disposal by the investment trust of an asset which is an interest in a non-reporting fund at the time of the disposal.
Treatment of interest in non-reporting fund: cases where conditions in regulation 42(2) would not be satisfied
44
1
This regulation applies in relation to an asset of an investment trust (“the asset”) —
a
which is an interest in a non-reporting fund, but
b
in relation to which the conditions in regulation 42(2) would not (apart from this regulation) be satisfied for the whole of the period specified in regulation 42(1)(b) in relation to the asset.
2
Paragraph (4) applies if the investment trust, in relation to the asset, reasonably expects to satisfy the conditions in regulation 42(2) for the period beginning with a date to be determined in accordance with paragraph (3) (“the deemed start date”) and ending with the date of the disposal of the asset.
3
The deemed start date is a date to be determined by the investment trust which must not be earlier than 1st January 2012.
4
The investment trust is treated for all purposes (including for the purposes of determining the beginning of the period mentioned in regulation 42(1)(b)) as if it had, on the deemed start date, disposed of the asset (and not satisfied the conditions in regulation 42(2)) and immediately reacquired the asset for a consideration equal to its market value on the deemed start date.
5
The investment trust must notify the Commissioners of the deemed start date by making an appropriate entry in its company tax return for the accounting period in which the deemed start date falls.
Index tracking funds
45
1
This regulation applies if —
a
an investment trust has an interest in a non-reporting fund,
b
the conditions in paragraph (2) are met throughout the relevant period.
2
The conditions are that —
a
in accordance with the instrument constituting the investment trust, the aim of the investment trust’s policy is to replicate the performance of a qualifying index,
b
the main purpose of the investment in the non-reporting fund is to represent the composition of the qualifying index, and
c
the capital and income returns of the investment trust replicate as closely as practicable the returns of the investment comprised in the qualifying index.
3
For the purposes of paragraph (2) an index is a “qualifying index” if —
a
it is based solely on the value of securities listed on a recognised stock exchange or admitted to trading on a regulated market,
b
either a competent authority for the United Kingdom or an authority responsible for regulating offshore funds recognises the index on the basis that —
i
its composition is sufficiently diverse,
ii
it represents an adequate benchmark for the market to which it refers, and
iii
it is published in such a way that it is widely available, and
c
it is calculated and published by a body which is managed independently from the management of the investment trust.
4
Regulation 17 of the Offshore Funds Regulations does not apply in respect of a disposal by the investment trust of the interest in the non-reporting fund.
5
In this regulation the “relevant period” means the period —
a
starting with the day on which the investment trust acquires the interest in the non-reporting fund (or any part of it), and
b
ending with the day of the disposal of the interest.
6
In this regulation —
a
a “competent authority for the United Kingdom” means the authority which is a competent authority for the United Kingdom for the purposes of Directive 2009/65/ EC of the European Parliament and of the Council on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) , and
b
“regulated market” has the same meaning as in Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments (see article 4.1(14)) .
Consequential amendment
46
For paragraph (6) of regulation 18 (the charge to tax: further provisions) of the Offshore Funds Regulations , substitute —
6
Nothing in regulation 17 of these Regulations applies to —
a
an authorised investment fund to which regulation 14ZB, 14ZD(1) or Part 6A of the Authorised Investment Fund (Tax) Regulations 2006 applies, or
b
an investment trust company to which regulation 43 or 45 of the Investment Trust (Approved Company) (Tax) Regulations 2011 apply.
.
Angela Watkinson
Jeremy Wright
Two of the Lords Commissioners of Her Majesty’s Treasury
14th December 2011