Statutory Instrument 1992 No. 2326

The Insurance Companies (Pensions Business) (Transitional Provisions) Regulations 1992

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© Crown Copyright 1992

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1992 No. 2326

INCOME TAX

The Insurance Companies (Pensions Business) (Transitional Provisions) Regulations 1992

The Commissioners of Inland Revenue, in exercise of the powers conferred on them by paragraphs 4 and 5(4) of Schedule 19AB of the Income and Corporation Taxes Act 1988^[1], hereby make the following Regulations:

Citation and commencement
    1.    These Regulations may be cited as the Insurance Companies (Pensions Business) (Transitional Provisions) Regulations 1992 and shall come into force on 2nd October 1992.

Interpretation
    2.    In these Regulations unless the context otherwise requires—
"accounting period" means any accounting period in relation to which Schedule 19AB has effect;


"the Board" means the Commissioners of Inland Revenue;


"the closing transitional date" shall be construed in accordance with regulation 3(2);


"the corresponding accounting period", in relation to a provisional repayment period, is the accounting period in which that provisional repayment period falls;


"insurance company" means a company to which Part II of the Insurance Companies Act 1982^[2] applies;


"the Management Act" means the Taxes Management Act 1970^[3];


"maximum reduced entitlement" has the meaning given by paragraph 4(6) of Schedule 19AB;


"the opening transitional date" shall be construed in accordance with regulation 3(1);


"paragraph 4" and "paragraph 5" mean, respectively, paragraph 4 and paragraph 5 of Schedule 19AB;


"provisional repayment" has the meaning given by paragraph 6(1) of Schedule 19AB and "provisional repayment period" shall be construed in accordance with paragraph 1 of that Schedule;


"Schedule 19AB" means Schedule 19AB to the Taxes Act;


"the Taxes Act" means the Income and Corporation Taxes Act 1988.

Specification of "the opening transitional date" and "the closing transitional date"
    3.—(1)  The date specified by these Regulations as "the opening transitional date" for the purpose of paragraph 4 is 2nd October 1992.

    (2)  The date specified by these Regulations as "the closing transitional date" for the purpose of paragraph 4 is 1st January 1999.

Reduction of provisional repayment by prescribed percentage
    4.—(1)  This regulation prescribes the percentage by which the amount of any provisional repayment to which an insurance company would otherwise be entitled under Schedule 19AB for any accounting period ending after the opening transitional date and before the closing transitional date shall be reduced.

    (2)  The prescribed percentage is 7.5 per cent.

Requirements to be specified in claim for provisional repayment
    5.    An insurance company claiming a provisional repayment for a provisional repayment period falling within any accounting period ending after the opening transitional date and before the closing transitional date shall specify in the claim—
 (a) the maximum amount to which it could have been entitled by way of provisional repayment for that provisional repayment period apart from these Regulations;
 (b) the maximum reduced entitlement for that provisional repayment period; and
 (c) the amount of the provisional repayment claimed for that provisional repayment period.

Interest where a provisional repayment exceeds the maximum reduced entitlement for a provisional repayment period
    6.—(1)  In any case where an insurance company claims, and is paid, by way of provisional repayment an amount in excess of the maximum reduced entitlement for the provisional repayment period to which the claim relates, interest shall be charged for the period specified in paragraph (2) at the rate specified in paragraph (3).

    (2)  The period specified in this paragraph is a period beginning on the date on which the amount of the excess is paid to the company and ending on the first occurrence of any of the following—
 (a) the date on which that amount is repaid to the Board;
 (b) the date on which the company becomes entitled to that amount when effect is given to a claim such as is mentioned in section 7(6) of the Taxes Act^[4], in section 42(5A) of the Management Act^[5] or in sub-paragraph (2) of paragraph 5, made in respect of the corresponding accounting period; or
 (c) the date on which the company becomes entitled to that amount when the assessment to corporation tax for the corresponding accounting period becomes final and conclusive.

    (3)  The rate specified in this paragraph is the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 87A of the Management Act^[6].

    (4)  Interest charged by virtue of paragraph (1) shall be treated for the purposes of section 30 of the Management Act^[7] as if it were an amount of corporation tax which had been repaid and which ought not to have been repaid.

    (5)  In relation to an amount assessed to corporation tax under section 30 of the Management Act by virtue of these Regulations, section 87A of that Act shall apply with the modifications specified in paragraph (6).

    (6)  The modifications specified in this paragraph are that—
 (a) the amount assessed to corporation tax under section 30 of the Management Act by virtue of these Regulations shall be taken to have become due and payable on the date on which that assessment was made; and
 (b) the words "(in accordance with section 10 of the principal Act)" in subsection (1) shall accordingly be disregarded.

Claims during transitional application of pay and file provisions
    7.    A claim under sub-paragraph (2) of paragraph 5 shall be made at the time of the delivery of the return under section 11 of the Management Act^[8] for the accounting period to which the claim relates.

A. M. W. Battishill

C. W. Corlett

Two of the Commissioners of Inland Revenue

29th September 1992

These Regulations, which come into force on 2nd October 1992, are made under paragraphs 4 and 5(4) of Schedule 19AB to the Income and Corporation Taxes Act 1988. Schedule 19AB was inserted by section 49 of, and Schedule 8 to, the Finance Act 1991, and has effect in relation to accounting periods beginning on or after 2nd October 1992.

Schedule 19AB provides that insurance companies carrying on pension business shall be entitled to provisional repayments of tax on pension business investment income. However, during a transitional period, the Commissioners of Inland Revenue ("the Board") may make provision, by regulations, for the amount of a provisional repayment for any accounting period within the transitional period to be reduced by a prescribed percentage. Schedule 19AB also makes provision for regulations made by the Board to require certain particulars to be specified in a claim for a provisional repayment, and for the charging of interest in any case where a company claims, and is paid, by way of provisional repayment, an amount which exceeds that to which it would otherwise be entitled, as reduced by the prescribed percentage. It is intended that Schedule 19AB will take effect so as to synchronise with the introduction of the legislative provisions relating to the new system for accounting for tax on the part of companies (Pay and File); and the Board is also empowered to specify in regulations the time at which a claim for a provisional repayment may be made during the transitional application of the Pay and File provisions.

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

Regulations 3 and 4 are concerned with the transitional period. Regulation 3 specifies 2nd October 1992 as "the opening transitional date" and 1st January 1999 as "the closing transitional date"; and regulation 4 prescribes 7.5 per cent. as the percentage by which the amount of a provisional repayment for accounting periods ending after 2nd October 1992 shall be reduced.

Regulation 5 makes provision for certain particulars to be specified in provisional repayment claims during the transitional period.

Regulation 6 is concerned with interest in a case where an amount paid to a company by way of provisional repayment exceeds the amount to which the company would otherwise be entitled as reduced by the prescribed percentage. Provision is made for the charging of interest in such a case, for the period for which, and the rate at which, the interest charge is to run, and for the recovery of the interest charge and of interest upon it.

Regulation 7 provides that, during the transitional application of the Pay and File provisions, a claim for a provisional repayment shall be made at the time that the company delivers its return under section 11 of the Taxes Management Act 1970.

[1] 1988 c. 1; Schedule 19AB was inserted by section 49 of, and Schedule 8 to, the Finance Act 1991 (c. 31) and has effect in relation to accounting periods beginning on or after 2nd October 1992 by virtue of S.I.1992/1746 (C.58). back

[2] 1982 c. 50. back

[3] 1970 c. 9. back

[4] Section 7(6) was inserted by section 98(3) of the Finance Act 1990 (c. 29) in relation to claims relating to income tax falling to be set off against corporation tax for accounting periods ending after a day to be appointed. back

[5] Section 42(5A) was inserted by section 97(3) of the Finance Act 1990 in relation to claims relating to income of accounting periods ending after a day to be appointed. back

[6] Section 87A was inserted, with respect to accounting periods ending after a day to be appointed, by section 85 of the Finance (No.2) Act 1987 (c. 51), and amended by paragraph 10(4) of Schedule 29 to the Income and Corporation Taxes Act 1988, section 179(1)(b) of the Finance Act 1989 (c. 26), section 96(12) of the Finance Act 1990, and paragraph 2 of Schedule 15 to the Finance Act 1991. back

[7] Section 30 was substituted by section 149 of the Finance Act 1982 (c. 39) and amended by paragraph 32 ofSchedule 29 to the Income and Corporation Taxes Act 1988, by section 149(3)(a) of the Finance Act 1989, section 105(1) of the Finance Act 1990 and paragraph 2(6) of Schedule 10 to the Taxation of Chargeable Gains Act 1992 (c. 12) and, from a day to be appointed, by section 88(1) to (4) of the Finance (No.2) Act 1987 and paragraph 10(3) of Schedule 29 to the Income and Corporation Taxes Act 1988. back

[8] Section 11 was amended by section 111 of, and paragraph 5 of Schedule 24 to, the Finance Act 1972 (c. 41), paragraph 8 of Schedule 7 to the Capital Gains Tax Act 1979 (c. 14), paragraph 32 of Schedule 29 to the Income and Corporation Taxes Act 1988, section 91(4) of the Finance Act 1990 and paragraph 2(2) of Schedule 10 to the Taxation of Chargeable Gains Act 1992, and, from a date to be appointed, by section 82 of the Finance (No.2) Act 1987, paragraph 10(2) of Schedule 29 to the Income and Corporation Taxes Act 1988 and section 91(2), (3) and (5) to (7) of the Finance Act 1990. back