[F151A Gilt-edged securities held under authorised arrangements.U.K.
(1)Subject to the provisions of any regulations under section 51B, where gilt-edged securities of an eligible person are for the time being held under arrangements that satisfy the applicable requirements—
(a)those securities shall be deemed to have been issued subject to the condition that the interest on them is paid without deduction of income tax; and
(b)that interest shall be so paid accordingly, but shall be chargeable under Case III of Schedule D.
(2)For the purposes of this section gilt-edged securities are securities of an eligible person so long as—
(a)they are in the beneficial ownership of a company, local authority or local authority association or of any health service body (within the meaning of section 519A) and that company, authority, association or body is beneficially entitled to the interest on them;
(b)they are in the beneficial ownership of a person who does not fall within paragraph (a) above but is of any such description as may be prescribed by regulations made by the Treasury and that person is beneficially entitled to the interest on those securities;
(c)the circumstances in which they are held are such that any income from them is eligible for relief from tax by virtue of section 505(1)(c), or would be so eligible but for section 505(3);
(d)the circumstances in which they are held are such that any income from them is eligible for relief from tax by virtue of section 592(2), 608(2)(a), 613(4), 614(2), (3) or (4), 620(6) or 643(2);
(e)they are assets of any such trust fund as is referred to in section 83 of the M1Insurance Companies Act 1982 (premiums trust funds of members of Lloyd’s); or
(f)the circumstances in which they are held are such that any income from them falls to be treated as the income of, or of the government of, a sovereign power or of an international organisation.
(3)For the purposes of this section the arrangements under which any gilt-edged securities are held shall be taken to satisfy the applicable requirements if—
(a)such conditions as may be imposed by or under any such regulations as may be made by the Treasury are satisfied in relation to those arrangements; and
(b)a declaration with respect to the satisfaction of those conditions has been made in accordance with any such regulations by such person having an entitlement to or in respect of the securities as may be determined under the regulations.
(4)The conditions that may, for the purposes of subsection (3)(a) above, be imposed by regulations under this section in relation to arrangements for the holding of any gilt-edged securities shall include—
(a)conditions as to the accounts in which the securities are to be held under the arrangements and as to the accounts into which interest on the securities is to be paid;
(b)conditions requiring persons holding the securities, or otherwise having functions under or in connection with the arrangements, to be persons of a description specified in the regulations or to be approved in accordance with the regulations;
(c)conditions requiring persons who, for purposes connected with the arrangements, act directly or indirectly—
(i)on behalf of the person beneficially entitled to the securities, or
(ii)on behalf of the person who holds them,
to be persons registered with the Board in accordance with the regulations; and
(d)conditions as to the provision about transfers of securities held under the arrangements that is to be contained in the arrangements.
(5)Regulations made by the Treasury for the purposes of this section may—
(a)impose requirements in relation to any such persons as are mentioned in subsection (4)(b) and (c) above with respect to the manner in which their functions under or in connection with the arrangements are exercised;
(b)require such persons—
(i)to consider the accuracy of any declaration made for the purposes of subsection (3)(b) above; and
(ii)themselves to make declarations as to the extent to which conditions or other requirements imposed for the purposes of this section appear to be, or to have been, satisfied or complied with;
(c)make provision—
(i)about the making of applications for approval or registration under any such regulations;
(ii)for the circumstances in which any approval or registration is to be or may be given or refused;
(iii)for the withdrawal or cancellation of any approval or registration;
(iv)for appeals against any refusal to grant an approval or to register any person, or against the withdrawal or cancellation of any approval or registration;
(d)make provision for the publication of information showing the effect of any determinations in pursuance of regulations made by virtue of paragraph (c) above;
(e)make provision for notices to be issued by the Board to such persons as may be described in the regulations where the Board are satisfied that this section has effect, or does not have effect, in relation to any gilt-edged securities;
(f)impose obligations—
(i)on persons having any rights in relation to gilt-edged securities held under arrangements described in the regulations,
(ii)on any such persons as are mentioned in subsection (4)(b) and (c) above, and
(iii)on persons who are applying to be approved or registered for the purposes of this section,
as to the provision of information, and the production of documents, to the Board or, on request, to an officer of the Board;
and
(g)impose requirements, framed wholly or partly by reference to the opinion of the Board, as to—
(i)the contents of any declaration to be made in accordance with regulations under this section,
(ii)the form and manner in which any declaration or information is to be made or provided in accordance with any such regulations, and
(iii)the keeping and production to, or to an officer of, the Board of any document in which any such declaration or information is contained.
(6)Any person who—
(a)contravenes, or fails to comply with, any requirement imposed on him by or under any regulations under this section, or
(b)fraudulently or negligently makes or produces any incorrect declaration, information or document in pursuance of any such requirement,
shall be liable to a penalty not exceeding £25,000.
(7)In this section “gilt-edged securities” means any securities which—
(a)are gilt-edged securities for the purposes of the 1992 Act; or
(b)will be such securities on the making of any order under paragraph 1 of Schedule 9 to that Act the making of which is anticipated in the prospectus under which they were issued.
(8)In this section “international organisation” means an organisation of which two or more sovereign powers, or the governments of two or more sovereign powers, are members; and if, in any proceedings, any question arises whether a person is an international organisation for the purposes of this section a certificate issued by or under the authority of the Secretary of State stating any fact relevant to that question shall be conclusive evidence of that fact.
(9)Regulations made by the Treasury for the purposes of this section may—
(a)make different provision for different cases; and
(b)contain such supplementary, incidental, consequential and transitional provision as appears to the Treasury to be appropriate.
(10)This section shall not apply to any interest paid before such day as the Treasury may by order appoint, and different days may be appointed under this subsection for different purposes.]
Subordinate Legislation Made
P1S. 51A(10) power exercised: 2.1.1996 appointed by S.I. 1995/2932
Textual Amendments
F1S. 51A inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 77
Marginal Citations