Office of Public Sector Information

PART 4 Record-keeping and provision of information

Obligation to keep proper records

21.  A relevant person shall, in respect of each annuity, keep relevant records to enable the Commissioners to ascertain the terms of the annuity and to whether there has been or is likely to be any contravention of the requirements of Chapter 7 of Part 6 of the 2005 Act or these Regulations.

Information to be provided to the Commissioners

22.—(1) The Commissioners may by notice require any person to whom premiums under an annuity are or have at any time been payable, within such period as may be specified in the notice, to furnish them with such information as they may reasonably require to enable them to ascertain or verify any of the matters mentioned in regulation 21.

(2) The period specified in a notice given under paragraph (1) shall be not less than 30 days beginning with the date on which the notice is given.

Inspection of records

23.—(1) The Commissioners may by notice require any person to whom premiums under an annuity are or have at any time been payable, to make available for inspection by an officer duly authorised for that purpose, at such a time as that officer may reasonably require, any documents (in any format) that—

(a) are in that person’s possession or control; and

(b) are relevant records.

(2) The period specified in a notice given under paragraph (1) shall be not less than 30 days beginning with the date on which the notice was given.

Period for which records to be kept

24.  An insurer must, in respect of each annuity, keep the relevant records for a period of three years beginning with the date on which the contract for the annuity was terminated.

Transfer of records

25.—(1) This regulation applies in any case where the obligations under any annuity of the person that issued, entered into or effected it (“the original relevant person”) are at any time the obligations of another person (“the transferee”) to whom there has been a transfer of the whole or part of a business previously carried on by the original relevant person.

(2) The original relevant person must, in respect of that annuity, deliver to the transferee the records that it was required to keep under regulation 21, within the period of three months beginning with the date of the transfer.

PART 5 Miscellaneous

Penalties

26.—(1) The Table in section 98 of the Taxes Management Act 1970 is modified in accordance with this regulation.

(2) In column 1, there shall be treated as having been added at the end—

“Regulations 21 and 22 of the Income Tax (Purchased Life Annuities) Regulations 2008.”

(3) In column 2, there shall be treated as having been added—

“Regulations 7, 23 and 25 of the Income Tax (Purchased Life Annuities) Regulations 2008.”

Transitional provision

27.  In the case of an annuity—

(a) the contract for which was made during the period beginning with 6th April 2007 and ending with (and including) 5th April 2008;

(b) under which the payments by the insurer to the annuitant are made in arrears; and

(c) under which the first payment to the annuitant is made on or after 6th April 2008,

the mortality tables applicable shall be the ones which were in force when the annuity was made and not those prescribed by regulation 7(3).

Revocations

28.  The following instruments are revoked—

(a) the Income Tax (Purchased Life Annuities) Regulations 1956(8);

(b) the Income Tax (Purchased Life Annuities) (Amendment) Regulations 1960(9);

(c) the Income Tax (Purchased Life Annuities) (Amendment) Regulations 1990(10); and

(d) the Income Tax (Purchased Life Annuities) (Amendment) Regulations 1991(11).

EXPLANATORY NOTE

(This note is not part of the Order)

These Regulations provide a new procedure for obtaining the exemption for purchased life annuities under sections 717 to 719 of the Income Tax (Trading and Other Income) Act 2005 (“the 2005 Act”). This new procedure reflects the amendments and repeals effected by section 46 of the Finance Act 2007 of sections 717, 723 and 873 of the 2005 Act, and of sections 656 and 658 of the Income and Corporation Taxes Act 1988. As a consequence, the Income Tax (Purchased Life Annuity) Regulations 1956 (S.I. 1956/1230, as amended by S.I. 1960/2308, S.I. 1990/626 and S.I. 1991/2808) are revoked, save for the transitional provision in relation to the mortality tables to be used for annuities purchased in the 2007-2008 tax year (regulation 27).

Those amendments and revocations come into force on 6th April 2008.

Part 1 of these Regulations contains introductory provisions, including provisions as to the interpretation and application of the Regulations.

Part 2 sets out the procedure to be followed where an annuitant has bought a purchased life annuity. Regulation 7 prescribes the mortality tables to be used by the insurer when calculating the exempt capital element. The Tables can be obtained from either the Institute of Actuaries (whose address is Staple Inn Hall, High Holborn, London WC1V 7QJ) or the Faculty of Actuaries (whose address is Maclaurin House, 18 Dublin Street, Edinburgh EH1 3PP). They can also be downloaded from the following website, on payment of a fee: www.actuaries.org.uk/Display_Page.cgi?url=/library/cmir17/welcome.xml.

Part 3 sets out additional requirements where an annuitant has bought a purchased life annuity from a non-United Kingdom insurer.

Part 4 deals with record-keeping and provision of information. A relevant person is required to keep relevant records in respect of each annuity for 3 years (regulations 21 and 24).

Part 5 makes miscellaneous and transitional provision.

A full regulatory impact assessment has not been produced for this instrument as no significant impact on the private or voluntary sectors is foreseen.