The Personal Equity Plan (Amendment) Regulations 1990

Explanatory Note

(This note is not part of the Regulations)

These Regulations, which come into force on 6th April 1990, amend the Personal Equity Plan Regulations 1989 (“the Principal Regulations”). The principal effects of the amendments are to increase the amount which may be subscribed to a plan in any year to £6,000, to add funds of funds to the category of qualifying investments for the purposes of plans, to permit shares received on the conversion of a building society into a company to be transferred into plans, and to reduce the percentage of the value of investments that must be held by authorised unit trusts, funds of funds and investment trusts in United Kingdom companies to 50 per cent. Alternatively plan investors may invest not more than £900 in any year in authorised unit trusts, funds of funds and investment trusts which do not satisfy that requirement. Special rules are provided for plans in which such non-qualifying investments are held on 5th April 1990.

Regulation 1 provides for citation and commencement.

Regulation 2 provides for interpretation.

Regulation 3 inserts new definitions in the Principal Regulations and substitutes other definitions for the existing definitions of “ordinary shares” and “authorised securities scheme”.

Regulation 4 removes a reference to the transitional provisions of the Principal Regulations.

Regulation 5 makes amendments to regulation 4 of the Principal Regulations clarifying the general conditions for plans, providing for the transfer into plans of shares received on the conversion of a building society to a company and increasing the subscription limit to £6,000.

Regulation 6 makes amendments to regulation 5 of the Principal Regulations clarifying the rules under which plan managers may carry out transactions in plan investments and for cash investments in plans.

Regulation 7 makes amendments to regulation 6 of the Principal Regulations adding funds of funds to the list of qualifying investments, reducing to 50 per cent. the value of investments that must be held by unit trusts, funds of funds and investment trusts in United Kingdom companies, and providing an alternative cash subscription limit for plan investors wishing to invest in trusts not satisfying that requirement.

Regulation 8 inserts a new regulation 6A in the Principal Regulations which provides special rules for plans in which non-qualifying investment were held in unit trusts, funds of funds or investment trusts on 5th April 1990.

Regulation 9 makes a minor amendment to regulation 9 of the Principal Regulations and regulation 10 amends the Principal Regulations by omitting the transitional provisions of regulation 29.

Regulation 11 provides for the revocations listed in the Schedule.