The Friendly Societies (Provisional Repayments for Exempt Business) Regulations 1993

Explanatory Note

(This note is not part of the Regulations)

Schedule 19AB to the Income and Corporation Taxes Act 1988 (“Schedule 19AB”) applies to an insurance company carrying on pension business; and makes provision for payments on account of tax borne by deduction and tax credits in respect of distributions received (“provisional repayments”). Schedule 19AB provides for provisional repayments to be determined by means of a calculation in which long term business is distinguished from other business.

These Regulations provide for Schedule 19AB to have effect (subject to certain modifications and exceptions) in relation to the tax exempt business of a friendly society (not all of whose profits are tax exempt) as it has effect in relation to the pension business of an insurance company.

Some friendly societies (“directive societies”) are obliged to distinguish between long term business and other business in classifying their assets, but others (“non-directive societies”) are not so obliged. These Regulations, accordingly, make different provision for the cases of directive societies and non-directive societies in calculating provisional repayments.