The Social Security (Contributions) Amendment (No. 6) Regulations 1991

Amendment of regulation 18 of the principal Regulations

2.  –

(1) Regulation 18 of the principal Regulations (calculation of earnings) shall be amended in accordance with the following paragraphs of this regulation.

(2) At the beginning of the regulation there shall be inserted the paragraph number “(1)”.

(3) At the end of the regulation there shall be added the following paragraphs–

“(2) Except where paragraph (4) or (6) of this regulation applies, the amount of earnings which is comprised in any payment by way of the conferment of any beneficial interest in any asset specified in Schedule 1A to these Regulations, and which falls to be taken into account in the computation of a person’s earnings, shall, for the purposes of earnings-related contributions, be calculated or estimated at a price which that beneficial interest might reasonably be expected to fetch if sold in the open market on the day on which it is conferred.

(3) For the purposes of paragraph (2) of this regulation, where any asset is not quoted on a recognised stock exchange within the meaning of section 841 of the Income and Corporation Taxes Act 1988(1), it shall be assumed that, in the open market which is postulated, there is available to any prospective purchaser of the beneficial interest in the asset in question all the information which a prudent prospective purchaser of the interest might reasonably require if he were proposing to purchase it from a willing vendor by private treaty and at arm’s length.

(a) an amount which is the lower of the two prices shown in the quotations for the shares or securities in The Stock Exchange Daily Official List on the date of that payment plus one-quarter of the difference between those two figures; or

(b) an amount which is halfway between the highest and lowest prices at which bargains, other than bargains done at special prices, were recorded in the shares or securities for the date of that payment,

except that in any case in which the relevant amounts could be ascertained in accordance with both sub-paragraphs (a) and (b) of this paragraph it shall be calculated or estimated by reference to the lower of those amounts; and for the purposes of this paragraph if the London trading floor is closed on the date of the relevant payment, the prices shown in the quotations and the prices at which bargains were recorded shall be ascertained by reference to the latest previous date or earliest subsequent date on which it is open, whichever affords the lower market value.

(5) Paragraph (4) of this regulation shall not apply to shares or securities for which The Stock Exchange provides a more active market elsewhere than on the London trading floor.

(6) The amount of earnings which is comprised in any payment by way of the conferment of a beneficial interest in any units in any unit trust scheme within the meaning of section 75(8) of the Financial Services Act 1986(2) having a published selling price and which falls to be taken into account in the computation of a person’s earnings, shall, for the purposes of earnings-related contributions, be calculated or estimated by reference to the selling price on the date of that payment or if none were published on that date, on the latest previous date on which such prices were published before the date on which that payment was made.”

(1)

1988 c. 1.

(2)

1986 c. 60.