PART 3CREDIT ARRANGEMENTS

TRANSACTIONS WHICH ARE NOT CREDIT ARRANGEMENTS

Liabilities that do not arise from capital expenditureI33

1

The liabilities of a local authority specified in paragraph (2) are liabilities specified for the purposes of section 7(3)(c) (exclusion of certain liabilities from definition of “qualifying liabilities”).

2

The liabilities specified for the purposes of paragraph (1) are liabilities that do not arise from a transaction which results in the local authority being required, in accordance with proper practices, to recognise a fixed asset in any balance sheet.

Annotations:
Commencement Information
I3

Reg. 3 in force at 1.1.2004 for specified purposes and 1.4.2004 in so far as not already in force, see reg. 1(1)

Retirement benefitsI24

1

Liabilities for retirement benefits appropriated to a pension reserve in accordance with proper practices are liabilities specified for the purposes of section 7(3)(c).

2

For the purposes of paragraph (1) and regulation 30, “retirement benefits” means benefits payable pursuant to—

a

section 31 of the London County Council (General Powers) Act 1921 (compensation to persons in Council’s service on abolition of office)9;

b

the “principal civil service pension scheme” within the meaning of section 2(10) of the Superannuation Act 1972 (further provisions relating to superannuation schemes under section 1)10 and for the time being in force;

c

the Police Pensions Regulations 198711;

d

the Firemen’s Pension Scheme Order 199212;

e

the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 199713;

f

the Local Government Pension Scheme Regulations 199714;

g

the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 200015; and

h

any other regulations made under section 24 of the Superannuation Act 1972 (compensation for loss of office etc.)16.

Annotations:
Commencement Information
I2

Reg. 4 in force at 1.1.2004 for specified purposes and 1.4.2004 in so far as not already in force, see reg. 1(1)

SUPPLEMENTARY PROVISION

Varied transactionsI45

For the purposes of Chapter 1 of Part 1 (capital finance etc.), a local authority shall be taken to have entered into a credit arrangement where—

a

on or after 1st April 2004, it enters into a transaction (“the new transaction”) which varies a transaction entered into previously, whether before, on or after 1st April 2004 (“the earlier transaction”);

b

the earlier transaction did not result in the local authority being taken to have entered into a credit arrangement; and

c

the local authority would, if it had entered into the earlier transaction as varied by the new transaction on—

i

the date on which the earlier transaction was entered into; or

ii

if later, 1st April 2004,

be taken to have entered into a credit arrangement,

and the date on which it is taken to have entered into the credit arrangement by virtue of this regulation is the date on which it enters into the new transaction.

Annotations:
Commencement Information
I4

Reg. 5 in force at 1.1.2004 for specified purposes and 1.4.2004 in so far as not already in force, see reg. 1(1)

COST OF CREDIT ARRANGEMENTS

Calculation of cost of credit arrangementsI16

For the purposes of section 8(2) (entry into a credit arrangement or variation to be treated as the borrowing of an amount equal to the cost of the arrangement or variation), the cost of a credit arrangement or variation of a credit arrangement shall be the amount of the liability in respect of that arrangement or variation which is shown, in accordance with proper practices, in the authority’s accounts.