The Finance Act 2002, Schedule 26, (Parts 2 and 9) (Amendment) Order 2006

Amendment of paragraph 4 of Schedule 26

6.—(1) Amend paragraph 4(1) (contracts excluded by virtue of their underlying subject matter) as follows.

(2) In sub-paragraph (2)(b) after “(2C)” insert “, (2CA)”.

(3) For sub-paragraph (2A) substitute—

“(2A) The conditions specified in this sub-paragraph are that the relevant contract—

(a) is a plain vanilla contract entered into by a company carrying on life assurance business;

(b) is an approved derivative for the purposes of Rule 4.3.5 of the Integrated Prudential Sourcebook; and

(c) does not fall within paragraph 3(1)(b).”.

(4) In sub-paragraph (2B)—

(a) in paragraph (b)(ii) after “of the company” insert “or any liability related to share capital of the company”, and

(b) in paragraph (c) for the words from “a deemed relevant contract" to the end substitute “a loan-contract embedded derivative.”

(5) After sub-paragraph (2C) insert—

“(2CA) The conditions specified in this sub-paragraph are—

(a) the relevant contract is entered into or acquired—

(i) by a company otherwise than in the course of activities forming an integral part of a trade carried on by it, or

(ii) by a company which is a mutual trading company;

(b) the relevant contract is—

(i) an option to acquire shares in a company, or

(ii) a future requiring delivery of shares in a company;

(c) the relevant contract is not a loan-contract embedded derivative; and

(d) the shares to be acquired or delivered constitute, or would (if acquired or delivered) constitute a substantial shareholding within the meaning of paragraph 8 of Schedule 7AC to TCGA 1992.”.

(1)

Paragraph 4 was amended by article 4 of S.I. 2004/2201, article 4 of S.I. 2005/646, article 5 of S.I. 2005/2082 and article 5 of S.I. 2005/3440.