The Income Tax (Gilt-edged Securities) (Gross Payments of Interest) Regulations 1995

Explanatory Note

(This note is not part of the Regulations)

These regulations impose conditions and requirements in connection with arrangements for the holding of gilt-edged securities the interest on which may be paid without deduction of tax in accordance with section 51A of the Income and Corporation Taxes Act 1988 (inserted by section 77 of the Finance Act 1995).

Regulation 1 provides for citation, commencement and effect, and regulation 2 contains definitions.

Regulation 3 introduces the conditions specified in regulations 4 to 6 that are to be satisfied in relation to the holding of gilt-edged securities.

Regulation 4 provides that the securities are to be held in an account designated by the Central Gilts Office of the Bank of England (a “STAR” account).

Regulation 5 provides that the securities are to be held (in a STAR account) by a member of the Central Gilts Office (“CGO member”) who is approved by the Board of Inland Revenue (“the Board”).

Regulation 6 provides that an intermediary through whom an instruction is passed for the holding of gilt-edged securities in a STAR account must be an intermediary of the description specified in the regulation or one who is approved by the Board.

Regulation 7 specifies the requirements referred to in regulations 5 and 6 in relation to a CGO member or intermediary who is not resident, and does not have a business establishment, in the United Kingdom.

Regulation 8 provides for the declarations that are required to be made by owners of gilt-edged securities before those securities can be placed in a STAR account.

Regulation 9 imposes requirements that a CGO member is to ensure are satisfied in relation to any gilt-edged securities before he is entitled to place those securities in a STAR account.

Regulation 10 imposes similar requirements that an intermediary is to ensure are satisfied in relation to any gilt-edged securities before he may arrange for those securities to be placed in a STAR account.

Regulation 11 specifies the circumstances in which a CGO member or intermediary is required to remove gilt-edged securities from a STAR account.

Regulation 12 provides for the furnishing of information to the Board by a CGO member or intermediary, or by an owner of gilt-edged securities.

Regulation 13 makes provision for the inspection by an officer of the Board of documents in the possession or control of a CGO member or intermediary relating to gilt-edged securities. Regulation 14 provides for the keeping of records, and regulation 15 for the retention of declarations, instructions and other documents, by those persons.