The Taxes (Interest Rate) (Amendment No. 3) Regulations 2001

Statutory Instruments

2001 No. 3860

INCOME TAX

INHERITANCE TAX

TAXES

The Taxes (Interest Rate) (Amendment No. 3) Regulations 2001

Made

3rd December 2001

Laid before the House of Commons

3rd December 2001

Coming into force

6th January 2002

The Treasury, in exercise of the powers conferred on them by section 178 of the Finance Act 1989(1), hereby make the following Regulations:

1.  These Regulations may be cited as the Taxes (Interest Rate) (Amendment No. 3) Regulations 2001 and shall come into force on 6th January 2002.

2.  In regulation 5(1) of the Taxes (Interest Rate) Regulations 1989(2)—

(a) for “6th March 1999” there shall be substituted “6th January 2002”;

(b) for “6.25 per cent. per annum” there shall be substituted “5 per cent. per annum”.

Tony McNulty

Graham Stringer

Two of the Lords Commissioners of Her Majesty’s Treasury

3rd December 2001

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend regulation 5 of the Taxes (Interest Rate) Regulations 1989 (S.I. 1989/1297 as substituted by S.I. 1994/1307). That regulation provides for the official rate of interest for the purposes of section 160 of the Income and Corporation Taxes Act 1988 (taxation of beneficial loans made to employees) by first specifying an official rate of interest generally and then specifying, by way of exception, different official rates of interest for certain beneficial loans in the currencies of countries specified in the Table to the regulation.

The amendment made by these Regulations specifies, with effect from 6th January 2002, a new general official rate of interest of 5 per cent. per annum, in substitution for the rate of 6.25 per cent. per annum specified by S.I. 1999/419.

(1)

1989 c. 26; section 178 was extended by section 160(5) of the Income and Corporation Taxes Act 1988 (c. 1) as amended by section 179(1)(g) of the Finance Act 1989, section 88(2) of the Finance Act 1994 (c. 9) and section 45(2) of, and Part VIII(3) of Schedule 29 to, the Finance Act 1995 (c. 4).

(2)

S.I. 1989/1297; relevant amending instruments are S.I. 1994/1307, 1567, 2657, 1995/2436, 1996/54, 1321 and 2644, 1997/1681, and 1999/419.