The Child Trust Funds Regulations 2004

PART 2 Other requirements to be satisfied in relation to accounts

General requirements for accounts

8.  —An account must satisfy the requirements that—

(a) it is the account for a single child (“the named child”);

(b) the named child is or has been an eligible child;

(c) no child may hold more than one account;

(d) at any time—

(i) where the named child is under 16, only a single responsible person in relation to the named child, or

(ii) where the named child is 16 or over, only the child,

(“the registered contact”) may give instructions to the account provider with respect to its management;

(e) the account must at all times be managed in accordance with these Regulations by an account provider and, subject to regulation 6(2), under terms agreed and recorded in a management agreement made between the account provider and the registered contact (on behalf of the named child where appropriate); and

(f) the management agreement must include instructions to the provider as to the manner in which Inland Revenue contributions and any subscriptions made are to be invested under the account.

(2) Apart from other requirements of these Regulations the terms so agreed shall include the conditions that—

(a) the account investments shall be in the beneficial ownership of the named child;

(b) the title to all account investments, except those falling within regulation 12(2)(k), (l) or (m), shall be vested in the account provider or his nominee, subject to sub-paragraph (f);

(c) where a share certificate or other document evidencing title to an account investment is issued, it shall be held by the account provider or as he may direct, subject to sub-paragraph (f);

(d) in relation to qualifying investments falling within regulation 12(2)(a), (b) and (f) to (j), the account provider shall, if the registered contact so elects (and subject to any charge for the arrangement), arrange for the registered contact to receive a copy of the annual report and accounts issued to investors by every company, unit trust, open-ended investment company or other entity in which account investments are held;

(e) in relation to qualifying investments falling within regulation 12(2)(a), (b) and (f) to (j), the account provider shall, if the registered contact so elects (subject to any charge for the arrangement, and to any provisions made under any enactment), be under an obligation to arrange for the registered contact to be able—

(i) to attend any meetings of investors in companies, unit trusts, open-ended investment companies and other entities in which account investments are held,

(ii) to vote, and

(iii) to receive, in addition to the documents referred to in sub-paragraph (d), any other information issued to investors in such companies, unit trusts, open-ended investment companies and other entities;

(f) if and so long as a person falling within regulation 14(2)(d)(iv) acts as account provider of an account, and the account investments include a policy of life insurance—

(i) the title to all such policies shall be vested in the registered contact, and

(ii) where a policy document or other document evidencing title to such policies of life insurance is issued, it shall be held by the registered contact;

(g) the account provider shall satisfy himself that any person to whom he delegates any of his functions or responsibilities under the management agreement is competent to carry out those functions or responsibilities;

(h) on the instructions of the registered contact (“the transfer instructions”) and within such time as is stipulated by the registered contact in the transfer instructions, the whole of an account, with all rights and obligations of the parties to it, shall be transferred free of expense (except any incidental expenses) to another account provider subject to and in accordance with regulation 21;

(i) where the account provider offers accounts of another description or type, on the instructions of the registered contact (“the internal transfer instructions”) and within such time as is stipulated by the registered contact in the internal transfer instructions, the account shall become (free of expense, except any incidental expenses) an account of that other description or type (any necessary change in the investments being made accordingly); and

(j) the account provider shall notify the registered contact if by reason of any failure to satisfy the provisions of these Regulations an account is or will become no longer exempt from tax by virtue of regulation 24.

(3) Where the transfer instructions or internal transfer instructions, or any new management agreement entered into by the registered contact with the account provider (or a new account provider) under regulation 8(1)(e), is a distance contract, the transfer or internal transfer shall only take effect once those contracts satisfy Condition 4 in regulation 5(1).

(4) The time stipulated in transfer instructions or internal transfer instructions shall be subject to any reasonable business period (not exceeding 30 days) of the account provider required for the practical implementation of the instructions.

(5) In this regulation, “incidental expenses” means stamp duty and other dealing costs of disposing of or acquiring investments.

Annual limit on subscriptions

9.—(1) Any person (including the child) may make subscriptions to a child’s account, subject to paragraphs (2) and (3).

(2) Subscriptions to an account made during any subscription year, that is—

(a) the period beginning with the day on which the account is opened (or if opened before the appointed day, opened for the purpose of accepting subscriptions under regulation 5(2)(b)), and ending immediately before the child’s next birthday, and

(b) any succeeding period of twelve months,

shall not in aggregate exceed the sum of £1,200.

(3) Where the aggregate of subscriptions in any year falls short of £1,200 or is nil, there shall be no addition to the amount for any succeeding year.

Statements for an account

10.—(1) The account provider must issue a statement for the account—

(a) annually, and

(b) where an account is transferred to another account provider under regulation 21, as at the transfer date.

(2) The statement date in the case of an annual statement must be—

(a) any date not more than 60 days before or after the named child’s birthday, and

(b) not more than 12 months from the previous statement date.

(3) The statement shall be sent—

(a) where the named child is the registered contact, to the child,

(b) where a responsible person is the registered contact, to the named child care of the registered contact,

(c) where the Official Solicitor or Accountant of Court has been appointed under section 3(10) of the Act, to the Official Solicitor or Accountant of Court, on behalf of the child, and

(d) in any other case, to the named child,

within 30 days of the statement date.

(4) Statements shall include the following information—

(a) the full name of the child;

(b) his address;

(c) his date of birth;

(d) his unique reference number;

(e) the description of the account (see regulation 4);

(f) the name of the registered contact (if any);

(g) the statement date;

(h) the total market value of the investments under the account at the previous statement date (where the account provider held the account at the named child’s previous birthday);

(i) the amount of any Government contributions claimed by the account provider under regulation 30, during the period between—

(i) the previous statement date referred to in paragraph (1)(a) or (b), or the opening of the account (whichever is the later), and

(ii) the statement date;

(j) the aggregate amount of subscriptions (if any) received during the period in sub-paragraph (i);

(k) the total amount of deductions (including management charges) made during the period in sub-paragraph (i);

(l) the total market value of the investments under the account at the statement date;

(m) the number or amount, description and market value of each of the investments under the account at the statement date;

(n) the basis used in calculating the market value of each investment under the account (together with a statement of any change from a basis used in the previous statement); and

(o) the exchange rate used where any investment is, or is denominated in, a currency other than sterling.

General investment rules

11.—(1) All transactions by way of purchase by an account provider of investments under an account shall be made—

(a) in the case of an authorised fund which is a dual priced unit trust, at the manager’s price for the sale of the relevant class of units within the meaning of, and complying with the requirements of, rule 15.4.4 of the Collective Investment Schemes Sourcebook(1);

(b) in the case of an authorised fund which is a single priced unit trust or an open-ended investment company, at the price of a unit or share within the meaning of, and complying with the requirements of, rule 4.3.11 of the Collective Investment Schemes Sourcebook; and

(c) in the case of all other account investments, at the price for which those investments might reasonably be expected to be purchased in the open market.

(2) In paragraph (1)—

“a dual priced unit trust” means an authorised unit trust in respect of which the manager gives different prices for buying and selling units at the same time;

“a single priced unit trust” means an authorised unit trust in respect of which the manager gives the same price for buying and selling units at the same time.

(3) All other transactions by way of sale or otherwise by an account provider in investments under an account shall be made at the price for which those investments might reasonably be expected to be sold or otherwise transacted, as the case may be, in the open market.

(4) Investments, or rights in respect of investments, may not at any time—

(a) be purchased or made otherwise than out of cash which an account provider holds under an account at that time; or

(b) be purchased from—

(i) the named child, or

(ii) the spouse of the named child,

so as to become account investments under the account.

(5) Subject to paragraph (6), contributions, subscriptions and any other cash held by an account provider under an account shall be held only in sterling and be deposited in an account with a deposit-taker, or a deposit account or a share account with a building society, which is designated as a CTF account for the purposes of these Regulations only.

(6) An account provider who is a European institution, a relevant authorised person or an assurance undertaking may hold an account investor’s cash subscription and other cash held under an account in the currency of the EEA State in which he has his principal place of business and may deposit such cash in an account, which is designated as mentioned in paragraph (5), with any person authorised under the law of that State to accept deposits.

Qualifying investments for an account

12.—(1) This regulation specifies the kind of investments (“qualifying investments for an account”) which may be purchased, made or held under an account.

(2) Qualifying investments for an account to which paragraph (1) refers are—

(a) shares, not being shares in an investment trust, issued by a company wherever incorporated and officially listed on a recognised stock exchange (see paragraph (3));

(b) securities—

(i) issued by a company wherever incorporated,

(ii) which satisfy at least one of the conditions specified in paragraph (5), and

(iii) in the case of securities of an investment trust, purchased or acquired by the account provider in circumstances where the investment trust satisfies the condition specified in paragraph (6);

(c) gilt-edged securities;

(d) any securities issued by or on behalf of a government of any EEA State;

(e) any securities which, in relation to a security mentioned in sub-paragraph (d), would be a strip of that security if “strip” had the same meaning as in section 47 of the Finance Act 1942(2), with the omission of the words “issued under the National Loans Act 1968”;

(f) shares in an investment trust, listed in the Official List of the Stock Exchange (see paragraph (3)), in circumstances where the trust satisfies the condition specified in paragraph (6);

(g) units in, or shares of, a securities scheme, warrant scheme or fund of funds scheme;

(h) units in, or shares of, a money market scheme;

(i) units in, or shares of, a UCITS;

(j) a depositary interest;

(k) cash deposited in a deposit account with a building society, or a person falling within section 840A(1)(b) of the Taxes Act(3) or a relevant European institution, subject to paragraph (8);

(l) cash deposited in a share account with a building society, subject to paragraph (8);

(m) policies of life insurance which satisfy the conditions specified in paragraphs (9) and (10);

(n) any securities issued under the National Loans Act 1968(4)—

(i) for the purpose of or in connection with raising money under the auspices of the Director of Savings within the meaning of section 11(1)(a) of the National Debt Act 1972(5), and

(ii) other than national savings certificates, premium savings bonds, national savings stamps and national savings gift tokens,

which, according to the terms and conditions subject to which they are issued and purchased, are expressly permitted to be held under an account.

(3) An investment in shares fulfils the condition as to official listing in paragraph (2)(a) or (f) if—

(a) in pursuance of a public offer, the account provider applies for the allotment or allocation to him of shares in a company or investment trust which are due to be admitted to such listing within 30 days of the allocation or allotment, and which, when admitted to such listing, would be qualifying investments for an account, and

(b) the shares are not allotted or allocated to the account provider in the circumstances specified in paragraph (4).

(4) The circumstances specified in this paragraph are where—

(a) the allotment or allocation of the shares was connected with the allotment or allocation of—

(i) shares in the company or investment trust of a different class, or

(ii) rights to shares in the company or investment trust of a different class, or

(iii) shares or rights to shares in another company or investment trust, or

(iv) units in or shares in, or rights to units in or shares in, an authorised fund or a part of an umbrella scheme, or

(v) securities or rights to securities of the company or investment trust, or of another company or investment trust,

to the account provider, the registered contact or any other person; and

(b) the terms on which the first-mentioned shares in this paragraph were offered were significantly more favourable to the account provider or the named child than they would have been if their allotment or allocation had not been connected as described in sub-paragraph (a).

(5) The conditions specified in this paragraph are—

(a) that the shares in the company issuing the securities are listed on the official list of a recognised stock exchange;

(b) that the securities are so listed;

(c) that the company issuing the securities is a 75 per cent. subsidiary of a company whose shares are so listed.

(6) The condition specified in this paragraph is that the investment trust has no eligible rental income, in its most recent accounting period to end before the date on which the shares in, or securities of, the investment trust first become investments under the account, provided that the shares or securities shall cease to be qualifying investments for an account if the investment trust has any eligible rental income, in subsequent accounting periods, during which the shares or securities are held.

(7) In paragraph (4)(a), “company” means any body corporate having a share capital.

(8) A deposit account or share account which is a qualifying investment for an account falling within paragraph (2)(k) or (l) must not be connected with any other investment, held by the named child or any other person, and for this purpose such an account is connected with an investment if—

(a) either was opened or acquired with reference to the other, or with a view to enabling the other to be opened or acquired on particular terms, or with a view to facilitating the opening or acquisition of the other on particular terms, and

(b) the terms on which the account was opened would have been significantly less favourable to the holder if the investment had not been acquired.

(9) The conditions specified in this paragraph are that—

(a) the insurance is on the life of the named child only;

(b) the terms and conditions of the policy provide—

(i) that the policy may only be owned or held as a qualifying investment for an account which satisfies the provisions of these Regulations;

(ii) that the policy shall automatically terminate if it comes to the notice of the account provider, in any manner, that the event specified in paragraph (11) has occurred in relation to the policy;

(iii) for an express prohibition of any payment of the proceeds from the termination of the policy or a partial surrender of the rights conferred by the policy, to the named child (while he is still a child); and

(iv) that the policy, the rights conferred by the policy and any share or interest in the policy or rights respectively, shall not be capable of assignment or (in Scotland) assignation, other than that they may be vested in the named child’s personal representatives, and that the title to the policy may be transferred to a new account provider subject to and in accordance with regulations 8(2)(f) and 21;

(c) the policy evidences or secures a contract of insurance which—

(i) falls within paragraph 1 or 3 of Part 2 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001(6), or

(ii) would fall within either of those paragraphs if the insurer were a company with permission under Part 4 of the Financial Services and Markets Act 2000(7) to effect or carry out contracts of insurance;

(d) the policy is not—

(i) a contract to pay an annuity on human life,

(ii) a personal portfolio bond within the meaning given by regulation 2(1) of the Personal Portfolio Bonds (Tax) Regulations 1999(8), or

(iii) a contract, the effecting and carrying out of which constitutes “pension business” within the meaning given by section 431B(1) of the Taxes Act(9); and

(e) after the first payment in respect of a premium in relation to the policy has been made, there is no contractual obligation on any person to make any other such payment.

(10) The condition specified in this paragraph is that no sum may at any time, at or after the making of the insurance, be lent to or at the direction of the named child or registered contact by or by arrangement with the insurer for the time being responsible for the obligations under the policy.

(11) The event specified in this paragraph is that—

(a) there has been a breach of any of the conditions in paragraph (9) or (10), or any of those conditions was not satisfied at the date on which the insurance was made; and

(b) the breach or non-compliance cannot be remedied in accordance with regulation 23, or (in any other case), has not been remedied within a reasonable time.

(12) Where the event specified in paragraph (11) occurs in relation to a policy, the policy shall nevertheless be treated, for the purposes of these Regulations, excepting paragraphs (9)(b)(ii) and (11), and regulations 37(6) and 38, as if it had satisfied the conditions in paragraphs (9) and (10) during the period—

(a) commencing at the time when that specified event occurred, and

(b) ending immediately before—

(i) the end of the final year in relation to the policy, within the meaning in section 546(4) of the Taxes Act, or

(ii) the time at which that specified event came to the notice of the account provider,

whichever first occurs (the “termination event”).

Conditions for application by responsible person or the child to open an account (and changes to an account)

13.—(1) An application by a responsible person in relation to a child or the child if 16 or over, as the case may be, (“the applicant”) to open an account for the child with an account provider must be made to the account provider in a statement which must satisfy the conditions specified in paragraphs (2) to (6).

(2) An application must specify the description of account applied for.

(3) An application must incorporate a declaration by the applicant that he—

(a) is aged 16 years of age or over,

(b) is—

(i) (where the child is under 16) a responsible person in relation to the named child (that is, that he has parental responsibility in relation to the child), or

(ii) the child if 16 or over, and

(c) is to be the registered contact for the account;

and where the application is not in writing, must authorise the account provider to record the terms of the declaration in a written declaration made on behalf of the applicant.

(4) The applicant must authorise the account provider (on behalf of the named child where appropriate)—

(a) to hold the child’s Inland Revenue contributions, subscriptions, account investments, interest, dividends and any other rights or proceeds in respect of those investments and cash, and

(b) to make on his behalf any claims to relief from tax in respect of account investments,

and the authority must continue until a further application and declaration is made in accordance with paragraph (10).

(5) An application must contain—

(a) the applicant’s full name,

(b) his address, including postcode,

(c) the named child’s full name,

(d) his address, including postcode, and

(e) the child’s unique reference number on the voucher.

(6) There may be only one declaration and authorisation under paragraphs (3) to (5) in force for an account at any time.

(7) Except in the case—

(a) of the death or incapacity of the registered contact,

(b) where the registered contact cannot be contacted,

(c) of the bringing to an end of a Court order, under which he is a responsible person for the named child,

(d) of the named child attaining the age of 16 years,

(e) where the Official Solicitor or Accountant of Court is appointed under section 3(10) of the Act, or

(f) where a Court so orders,

any change in the identity of the registered contact shall require confirmation by the current registered contact that his declaration and authorisation under paragraphs (3)(c) and (4) is cancelled.

(8) An account provider must decline to accept an application if he has reason to believe that—

(a) the voucher has expired, or is not or might not be genuine, or

(b) the applicant has given untrue information in his application.

(9) Where the application is not in writing, the account provider shall make the written declaration referred to in paragraph (3), and notify the applicant of its contents, and such declaration shall take effect from the date on which the applicant agrees the contents (subject to any corrections), and if he neither agrees or disagrees with the contents within 30 days, he shall be treated as having agreed them.

(10) Where—

(a) there is a change in the identity of the registered contact, the new registered contact, or

(b) an account has been opened by the Inland Revenue under regulation 6 (Revenue allocated accounts) and a responsible person in relation to the child (or the child, if 16 or over) subsequently applies to the account provider to be the registered contact for the account, he,

shall make the application and declaration required by paragraphs (3) to (5).

Account provider—qualifications and Board’s approval

14.—(1) This regulation specifies the circumstances (“qualifying circumstances”) in which a person may be approved by the Board as an account provider.

(2) The qualifying circumstances are the following—

(a) the person must make an application to the Board for approval in a form specified by the Board;

(b) the person must undertake with the Board—

(i) to either offer stakeholder accounts to the general public (whether or not accounts of another description are offered), or to fulfil the requirements in paragraph (3),

(ii) to accept vouchers from any responsible person or the child if 16 or over (subject to regulation 13(8)),

(iii) where the person accepts Revenue allocated accounts, to allow instructions for their management to be made or given by post (whether or not other methods are allowed),

(iv) to publicise (and up-date where appropriate) statements of the minimum amount which may be subscribed to an account on a single occasion, and the permitted means of payment of subscriptions,

(v) to inform persons proposing to make subscriptions to an account (other than the named child) that the subscription is a gift to the child,

(vi) to publicise (and up-date where appropriate) statements of the extent to which social, environmental or ethical decisions are taken into account in selecting, retaining or realising investments,

(vii) that a child’s unique reference number shall only be used for the purposes of the child’s account (and of fulfilling the requirements of these Regulations with regard to that account), and

(viii) that whether there is an initial contribution or special contribution to an account, whether there is a supplementary contribution to the account, and whether the account is a Revenue allocated account is information held for the purposes mentioned in paragraph (vii) only, and shall not be used for other purposes (including marketing other products);

(c) the person must demonstrate to the satisfaction of the Board that the person can correctly operate the procedures in regulation 30;

(d) an account provider must be—

(i) an authorised person within the meaning of section 31(1)(a) or (c) of, or Schedule 5 to, the Financial Services and Markets Act 2000(10), who has permission to carry on one or more of the activities specified in Articles 14, 21, 25, 37, 40, 45, 51, 53 and (in so far as it applies to any of those activities) 64 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001(11), but excluding any person falling within paragraph (iv) below;

(ii) a European institution which carries on one or more of those activities;

(iii) a building society, a person falling within section 840A(1)(b) of the Taxes Act(12) or a relevant European institution; or

(iv) an insurance company within the meaning given by section 431(2) of the Taxes Act, an incorporated friendly society or a registered friendly society, or any other assurance undertaking;

(e) an account provider must not be prevented from acting as such by any requirement imposed under section 43 of the Financial Services and Markets Act 2000, or by any prohibition imposed by or under any rules made by the Financial Services Authority under that Act; and

(f) an account provider who—

(i) is a European institution or a relevant authorised person and who does not have a branch or business establishment in the United Kingdom, or has such a branch or business establishment but does not intend to carry out all his functions as an account provider at that branch or business establishment, or

(ii) falls within the expression “any other assurance undertaking” in sub-paragraph (d)(iv),

must fulfil one of the three requirements specified in regulation 15.

(3) The requirements in this paragraph are that the person provides to any potential applicant for a child trust fund (prior to discussing any application under regulation 13)—

(a) a statement that a stakeholder account is available from a named alternative account provider who offers it on the terms in paragraph (2)(b)(i) (omitting the words from “, or to” to the end);

(b) a detailed description of that stakeholder account; and

(c) sufficient information (according to the method of communication used, and including documentation where appropriate) to put the potential applicant in the position to make an application to that alternative account provider, complying with regulation 13.

(4) The terms of the Board’s approval may include conditions designed to ensure that the provisions of these Regulations are satisfied.

Account provider—appointment of tax representative

15.—(1) This regulation specifies the requirements mentioned in regulation 14(2)(f).

(2) The first requirement specified in this regulation is that—

(a) a person who falls within subsection (5) of section 333A of the Taxes Act is for the time being appointed by the account provider to be responsible for securing the discharge of the duties prescribed by paragraph (5) which fall to be discharged by the account provider, and

(b) his identity and the fact of his appointment have been notified to the Board by the account provider.

(3) The second requirement specified in this regulation is that there are for the time being other arrangements with the Board for a person other than the account provider to secure the discharge of such duties.

(4) The third requirement specified in this regulation is that there are for the time being other arrangements with the Board designed to secure the discharge of such duties.

(5) The duties prescribed by this paragraph are those that fall to be discharged by an account provider under these Regulations.

(6) The appointment of a person in pursuance of the first requirement shall be treated as terminated in circumstances where—

(a) the Board have reason to believe that the person concerned—

(i) has failed to secure the discharge of any of the duties prescribed by paragraph (5), or

(ii) does not have adequate resources to discharge those duties, and

(b) the Board have notified the account provider and that person that they propose to treat his appointment as having terminated with effect from the date specified in the notice.

(7) Where, in accordance with the first requirement, a person is at any time responsible for securing the discharge of duties, the person concerned—

(a) shall be entitled to act on the account provider’s behalf for any of the purposes of the provisions relating to the duties;

(b) shall secure (where appropriate by acting on the account provider’s behalf) the account provider’s compliance with and discharge of the duties; and

(c) shall be personally liable in respect of any failure of the account provider to comply with or discharge any such duty as if the duties imposed on the account provider were imposed jointly and severally on the account provider and the person concerned.

Account provider—withdrawal by Board of approval

16.—(1) This regulation specifies the circumstances (“the disqualifying circumstances”) in which the Board may by notice withdraw their approval of a person as an account provider in relation to an account.

(2) The disqualifying circumstances are that the Board have reason to believe—

(a) that any provision of the Act or these Regulations, or any term of an undertaking given in accordance with regulation 14(2)(b) or condition under regulation 14(4), is not or at any time has not been satisfied, either in respect of an account managed by the account provider or otherwise; or

(b) that a person to whom they have given approval to act as an account provider is not qualified so to act.

(3) The notice to which paragraph (1) refers shall specify—

(a) the date from which the Board’s approval is withdrawn; and

(b) the disqualifying circumstances.

Account provider—appeal against non-approval or withdrawal of Board’s approval

17.  A person who has been notified of a decision by the Board not to approve that person as an account provider, or an account provider to whom notice of withdrawal of approval has been given under regulation 16, may appeal against the decision by notice given to the Board within 30 days after the date of the notification or notice.

Permitted withdrawals from an account

18.  Withdrawals from an account before the date on which the named child attains the age of 18 years may only be made—

(a) by the account provider, to settle any management charges and other incidental expenses, which are due by or under the management agreement, or

(b) where the account provider is satisfied that the named child has died under that age.

Account provider ceasing to act (or ceasing to accept Revenue allocated accounts)

19.—(1) A person shall give notice to the Board and to the registered contact of the account which he manages (or, if there is no registered contact, the named child) of his intention to cease to act as the account provider not less than 30 days before he so ceases so that his obligations to the Board under the account can be conveniently discharged at or about the time he ceases so to act, and the notice to the registered contact or the named child shall inform him of the right to transfer the account under regulation 21, and of his rights under regulation 20(3).

(2) A person shall also give notice to the Board of his intention to cease to accept further Revenue allocated accounts under regulation 6, not less than 30 days before he so ceases.

Account provider ceasing to qualify

20.—(1) A person shall cease to qualify as an account provider and shall notify the Board within 30 days of the relevant event in sub-paragraphs (a) to (f), of that relevant event, where—

(a) the person no longer fulfils the conditions of regulation 14;

(b) in the case of an individual, he becomes bankrupt, or the subject of a bankruptcy restrictions order or an interim bankruptcy restrictions order or, in Scotland, his estate is sequestrated;

(c) he makes any arrangement or composition with his creditors generally;

(d) in the case of a company, a resolution has been passed or a petition has been presented to wind it up;

(e) in the case of a building society, a person falling within section 840A(1)(b) of the Taxes Act or a relevant European institution—

(i) it ceases to be a building society or to fall within section 840A(1)(b) of the Taxes Act or to be a relevant European institution, as the case may be;

(ii) its directors have made a proposal under Part 1 of the Insolvency Act 1986(13) for a composition in satisfaction of its debts or a scheme of arrangement of its affairs; or

(iii) a receiver or manager of its property has been appointed; or

(f) in the case of a European institution, a relevant authorised person or an assurance undertaking which falls within regulation 14(2)(d)(iv), action corresponding to any described in sub-paragraph (b) to (e) has been taken by or in relation to the institution, person or undertaking under the law of an EEA State.

(2) On giving the notice referred to in paragraph (1), the person shall also notify the registered contact (or, if there is no registered contact, the named child) of the right to transfer the account under regulation 21, and the notice shall inform the recipient of the rights under paragraph (3).

(3) Where a registered contact—

(a) receives a notice under paragraph (2), or regulation 19(1), and

(b) within 30 days of the sending of the notice, transfers the account to another account provider pursuant to regulation 21,

the period between the transferor ceasing to act or qualify as an account provider, and the transfer to the transferee, shall be ignored in determining whether the account has at all times been managed by an account provider.

Transfer of accounts to other account providers

21.—(1) Where—

(a) arrangements are made by a registered contact to transfer the whole of the investments under an account from one account provider (“the transferor”) to another account provider (“the transferee”), or

(b) the whole of the investments under an account are so transferred in consequence of an account provider (“the transferor”) ceasing to act or to qualify as an account provider,

the transfer shall be treated as a transfer of the account.

(2) The account and its description under regulation 4 shall not be affected for the purposes of these Regulations by reason of the transfer, save that, where the registered contact specifies in accordance with paragraph (3)(a) an account of a different description, the account shall, on the transfer, become an account of that other description.

(3) The registered contact shall make—

(a) the application required by regulation 13(2) (modified as if the words “applied for” were replaced with “transferred”), and

(b) the application and declaration required by regulation 13(3) to (5),

to the transferee.

(4) The transferor shall on the date of the transfer give the transferee a notice containing the information specified in paragraph (5) and the declaration specified in paragraph (6).

(5) The information specified in this paragraph is—

(a) as regards the named child—

(i) his full name,

(ii) his date of birth,

(iii) his unique reference number;

(b) as regards the account—

(i) the description of the account,

(ii) the date of the transfer,

(iii) the total amount subscribed to the account during the period from the beginning of the subscription year in which the transfer takes place to the date of the transfer,

(iv) any amount which has been claimed from the Board under regulations 26, 27 or 30 and which has not been paid at the date of the transfer;

(c) the full name and address, including postcode, of the registered contact who has made the transfer arrangements.

(6) The declaration specified in this paragraph is a declaration by the transferor that—

(a) he has fulfilled all his obligations to the named child, the Board or otherwise, which are imposed by these Regulations;

(b) he has transferred to the transferee or his nominee all the account investments and that, where registration of any such transfer is required, he has taken the necessary steps to ensure that those account investments can be registered in the name of the transferee or nominee;

(c) he will forward any further payment received in respect of those account investments to the transferee, on receipt of the payment, and

(d) the information contained in the notice is correct.

Recoupment of Inland Revenue contributions to void accounts (and other accounts)

22.—(1) Where—

(a) the named child has never been an eligible child (see regulation 8(1)(b)), or

(b) there is a breach of regulation 8(1)(c) in relation to an account,

the account is void, and the persons mentioned in paragraph (3) shall account to the Inland Revenue for Inland Revenue contributions paid in respect of the account, together with income and gains which have arisen in consequence of the crediting of any of those payments to the account.

(2) Where—

(a) the condition in section 9(5) of the Act was satisfied in relation to a child, but the determination under sections 18 to 21 of the Tax Credits Act 2002(14) has been overturned, or

(b) the condition in section 9(8) of the Act was satisfied in relation to a child, but it has subsequently been determined that payment of the relevant benefit or tax credit mentioned in that subsection should not have been made, or that the applicable amount or tax credit should not have included an amount or credit in respect of the child,

the persons mentioned in paragraph (3) shall account to the Inland Revenue for any supplementary contribution paid in respect of the account, together with income and gains which have arisen in consequence of the crediting of any such payment to the account.

(3) The persons mentioned in paragraphs (1) and (2) are—

(a) the account provider (to the extent that he has assets in his possession or control),

(b) the registered contact,

(c) the named child, and

(d) any person in whom the Inland Revenue contributions, income or gains, or any property directly or indirectly representing any of them, is vested (whether beneficially or otherwise)

and they shall be jointly and severally liable.

(4) Where a person accountable under this regulation is notified by the Inland Revenue that an amount is due from him under it, that amount shall be treated for the purposes of Part 6 of the Management Act(15) (collection and recovery) as if it were tax charged in an assessment on that person, and due and payable.

“Repair” of invalid accounts

23.—(1) Except in the case of a breach of regulation 8(1)(b) or (c) (where no repair of an account is possible), it is an overriding requirement to be satisfied in relation to an account that the account provider and registered contact, as the case may be, take any steps necessary to remedy any breach of these Regulations.

(2) Where a breach is remedied as mentioned in paragraph (1), the account shall, to the extent of that breach, be treated as having been a valid account at all times, except for determining whether there has been a breach of these Regulations for the purposes of section 20 of the Act (penalties).

(1)

Available from the Financial Services Authority.

(2)

1942 c. 21; the relevant amendment to section 47 was made by section 202(2) of the Finance Act 1996 (c. 8).

(3)

1988 c. 1; section 840A was inserted by paragraph 1(1) of Schedule 37 to the Finance Act 1996 (c. 8).

(4)

1968 c. 13.

(5)

1972 c. 65.

(6)

S.I. 2001/544.

(7)

2000 c. 8.

(8)

S.I. 1999/1029.

(9)

1988 c. 1; section 431B was inserted by paragraphs 2 and 57 of schedule 8 to the Finance Act 1995 (c. 4).

(10)

2000 c. 8.

(11)

S.I. 2001/544.

(12)

1988 c. 1; section 840A was inserted by paragraph 1(1) of Schedule 37 to the Finance Act 1996 (c. 8).

(13)

1986 c. 45.

(14)

2002 c. 21.

(15)

1970 c. 9.