The Child Trust Funds Regulations 2004 No. 1450

PART 1 U.K.Introductory

InterpretationU.K.

2.—(1) In these Regulations—

(a)the following expressions have the meanings given in the Child Trust Funds Act 2004 (“the Act”)—

“child”

“child trust fund”

“eligible child”

“Inland Revenue”

“Inland Revenue contributions” (see section 11(2) of the Act),

“parental responsibility” (see section 3(9) of the Act);

“relevant person” (see section 15(2) of the Act),

“responsible person”, in relation to a child under 16 (see section 3(8) of the Act),

“the person entitled to child benefit in respect of the child” (see section 2(1)(a), (4) and (6) of the Act);

(b)except where the context otherwise requires—

“account” means a scheme of investment which (except in regulation 22(1)) qualifies as a child trust fund, other than in the cases of—

(i)an account with a deposit-taker,

(ii)a share or deposit account with a building society, or

(iii)a deposit account with a person falling within section 840A(1)(b) of the Taxes Act M1, or a relevant European institution;

an “account investment” is an investment under the account which is a qualifying investment for an account within the meaning of regulation 12;
an “account provider” is a person who fulfils the conditions of these Regulations and is approved by the Board for the purpose of these Regulations as an account provider;
“appointed day” means the day appointed, under section 27 of the Act, for the purposes of sections 8 and 9 of the Act;
“assurance undertaking” has the meaning in Article 2 of the Council Directive of 5th November 2002 concerning life assurance (2002/83/EC) M2;
[F1“Bank of England base rate” means the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short-term liquidity in the money markets;]
[F2“the Board” means the Commissioners for Her Majesty’s Revenue and Customs;]
“building society” means a building society within the meaning of the Building Societies Act 1986 M3, or the Irish Building Societies Act 1989 M4;
“company”, except in regulation 12(4)(a), means any body corporate having a share capital other than—
(i)
an open-ended investment company, within the meaning given by section 236 of the Financial Services and Markets Act 2000 M5,
(ii)
a UCITS,
(iii)
an industrial and provident society, or
(iv)
a body corporate which is a 51 per cent. subsidiary of any industrial and provident society;
[F3“credit union” means a society registered as a credit union under the Industrial and Provident Societies Act 1965 or the Credit Unions (Northern Ireland) Order 1985;]
“deposit-taker” has the meaning given by section 481(2) of the Taxes Act;
“the Director of Savings” has the same meaning as in the National Debt Act 1972 M6;
“the Distance Marketing Directive” means Directive 2002/65/EC of the European Parliament and of the Council of 23rd September 2002 M7, and includes any provisions by which an EEA State or the United Kingdom has transposed the Directive or has corresponding obligations in its domestic law, and “distance contract” has the meaning in that Directive;
“electronic communications” includes any communications by means of a telecommunication system (within the meaning in the Telecommunications Act 1984 M8);
“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992, as adjusted by the Protocol signed at Brussels on 17th March 1993 M9;
“EEA State” means a State, other than the United Kingdom, which is a Contracting Party to the EEA Agreement;
“European institution” means an EEA firm of the kind mentioned in paragraph 5(a), (b) or (c) of Schedule 3 to the Financial Services and Markets Act 2000 which is an authorised person for the purposes of that Act as a result of qualifying for authorisation under paragraph 12 of that Schedule;
“51 per cent. subsidiary” and “75 per cent. subsidiary” have the meanings given by section 838 of the Taxes Act;
“gains”, except in regulations 22(1) to (3), 24(a)(ii), (iii) and (v), 37(5) and 38, means “chargeable gains” within the meaning in the 1992 Act;
“gilt-edged securities” has the meaning given by paragraphs 1 and 1A of Schedule 9 to the 1992 Act M10;
“incorporated friendly society” means a society incorporated under the Friendly Societies Act 1992 M11;
“industrial and provident society” means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or under the Industrial and Provident Societies (Northern Ireland) Act 1969 M12;
“investments under the account” has the same meaning as investments under a child trust fund in the Act;
“investment trust” has the meaning given by section 842 of the Taxes Act, and references to the “eligible rental income” of an investment trust have the same meaning as in that section;
“the Management Act” means the Taxes Management Act 1970 M13;
“market value” shall be construed in accordance with section 272 of the 1992 Act;
“the 1992 Act” means the Taxation of Chargeable Gains Act 1992;
[F4“the New Collective Investment Schemes Sourcebook” means the Sourcebook of that name made by the Financial Services Authority under the Financial Services and Markets Act 2000;
“non-UCITS retail scheme”—
(a)
has the meaning in the New Collective Investment Schemes Sourcebook (that is, a scheme to which, or to whose authorised fund manager and depositary, Sections 5.1, 5.4 and 5.6 of that Sourcebook apply),
(b)
includes a “recognised scheme” by virtue of section 270 or 272 of the Financial Services and Markets Act 2000, which would fall within paragraph (a) of this definition if it were an authorised fund, and
(c)
includes a sub-fund of an umbrella which the terms of the scheme identify as a sub-fund which would fall within paragraph (a) or (b) of this definition if it were itself an authorised fund or a recognised scheme.
In this definition, expressions defined in the Glossary forming part of the Financial Services Authority Handbook have those defined meanings;]
“notice”, except in regulations 12(12) and 37(6)(a), means notice in writing;
[F4“qualifying units in or shares of a non-UCITS retail scheme” means that—
(a)
the instrument constituting the scheme secures that redemption of the units or shares in question shall take place no less frequently than bi-monthly (see Rule 6.2.16(6) of the New Collective Investment Schemes Sourcebook omitting the words “Except where (7) applies, and”, read with Rule 6.3.4(1), whether or not those Rules apply to the scheme), and
(b)
a provision for suspension of dealings in exceptional conditions in accordance with Rule 7.2 of that Sourcebook (or any foreign procedure which is a direct foreign equivalent of that Rule) shall not be treated as a provision contrary to paragraph (a) of this definition;]
“recognised stock exchange” has the same meaning as in section 841 of the Taxes Act;
“registered friendly society” has the meaning given by the Friendly Societies Act 1992 and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society;
“relevant authorised person” has the same meaning as in section 333A(12) of the Taxes Act;
“relevant European institution” has the meaning given by section 326A(10) of the Taxes Act;
“security” means any loan stock or similar security of a company whether secured or unsecured;
“subscriptions” has the meaning in section 12(1) of the Act (but excluding Inland Revenue contributions and income or gains arising from investments under the account);
“tax” where neither income tax nor capital gains tax is specified means either of those taxes;
“the Taxes Act” means the Income and Corporation Taxes Act 1988;
“year” except in the expression “subscription year” in regulations 9, 21(5)(b) and 32(2)(b)(iv), means a year of assessment (within the meaning in section 832(1) of the Taxes Act, or section 288(1) of the 1992 Act, as the case may be);
(c)
“authorised fund” means—
(i)
an authorised unit trust, or
(ii)
an open-ended investment company with variable capital incorporated in the United Kingdom in the case of which an authorisation order made by the Financial Services Authority under regulation 14 of the Open-Ended Investment Companies Regulations 2001 M14 is in force;
“authorised unit trust” means a unit trust scheme in the case of which an authorisation order made by the Financial Services Authority under section 243 of the Financial Services and Markets Act 2000 is in force;
“the Collective Investment Schemes Sourcebook” means the sourcebook of that name made by the Financial Services Authority under the Financial Services and Markets Act 2000;
“depositary interest” means the rights of the person mentioned in paragraph (ii), under a certificate or other record (whether or not in the form of a document) acknowledging—
(i)
that a person holds relevant investments or evidence of the right to them, and
(ii)
that another person is entitled to rights in or in relation to those or identical relevant investments, including the right to receive such investments, or evidence of the right to them or the proceeds from such investments, from the person mentioned in paragraph (i),
where “relevant investments” means investments which are exclusively qualifying investments for an account falling within regulation 12(2)(a) to (i), and the rights mentioned in paragraph (ii) are exclusively rights in or in relation to relevant investments;
“fund of funds scheme” means—
(i)
an authorised fund which according to the terms of the scheme is a fund of funds scheme belonging to the category under that name established by the Financial Services Authority, and
(ii)
a part of an umbrella scheme which the terms of the scheme identify as a part that would belong to that category if it were itself an authorised fund;
“money market scheme” means—
(i)
an authorised fund which according to terms of the scheme is a money market scheme belonging to the category under that name established by the Financial Services Authority, and
(ii)
a part of an umbrella scheme which the terms of the scheme identify as a part that would belong to that category if it were itself an authorised fund;
“open-ended investment company”, except in sub-paragraph (a), has the meaning given by subsection (10) of section 468 of the Taxes Act as that subsection is added in relation to open-ended investment companies by regulation 10(4) of the 1997 Regulations, and “shares” in relation to an open-ended investment company, includes shares of any class and of any denomination of a given class and, in relation to a part of an umbrella company, means shares in the company which confer for the time being rights in that part;
“securities scheme” means—
(i)
an authorised fund which according to the terms of the scheme is a securities scheme belonging to the category under that name established by the Financial Services Authority, and
(ii)
a part of an umbrella scheme which the terms of the scheme identify as a part which would belong to that category if it were itself an authorised fund;
“the 1997 Regulations” means the Open-ended Investment Companies (Tax) Regulations 1997 M15;
“UCITS” means undertakings for collective investment in transferable securities within the meaning of Article 1 of Council Directive 85/611 M16;
“umbrella scheme” means an authorised fund which according to the terms of the scheme is an umbrella scheme belonging to the category under that name established by the Financial Services Authority, and
(i)
in the case of an authorised fund which is an authorised unit trust, references to a part of an umbrella scheme shall be construed in accordance with subsection (8) of section 468 of the Taxes Act, and, in relation to a part of an umbrella scheme, references to investments subject to the trusts of an authorised unit trust and to a unit holder shall be construed in accordance with subsection (9) of that section, and
(ii)
in the case of an authorised fund which is an open-ended investment company, references to a part of an umbrella scheme shall be construed in accordance with subsection (18) of section 468 of the Taxes Act as that subsection is added in relation to open-ended investment companies by regulation 10(4) of the 1997 Regulations, and, in relation to a part of an umbrella scheme, references to investments of the company shall be construed in accordance with subsection (12) of that section as so added;
“unit holder”, except in relation to a part of an umbrella scheme, has the meaning given by subsection (6) of section 468 of the Taxes Act;
“unit trust scheme” has the meaning given by subsection (6) of section 468 of the Taxes Act;
“units”, in relation to an authorised unit trust, means the rights or interests (however described) of the unit holders in that unit trust and, in relation to a part of an umbrella scheme, means the rights or interests for the time being of the unit holders in that part;
“warrant scheme” means—
(i)
an authorised fund which according to the terms of the scheme is a warrant scheme belonging to the category under that name established by the Financial Services Authority, and
(ii)
a part of an umbrella scheme which the terms of the scheme identify as a part that would belong to that category if it were itself an authorised fund.

(2) The table below indexes other definitions in these Regulations—

Term defined	Regulation
“the applicant”	5
“the commencement date”	7(8)
“description” of an account	4
“the disqualifying circumstances”	16
“first return period”	30(1)
“fortnightly period”	30(1)
“initial contribution”	7(1)
“interim tax claim”	26(2)
“local authority”	33(1)
“looked after child”	33(1)
“management agreement”	5
“the named child”	5 and 8(1)
“qualifying circumstances”	14
“qualifying investments for an account”	12
“registered contact”	8(1)(d)
“second return period”	30(1)
“special contribution”	7(1)
“subscription year”	9(2)
“supplementary contribution”	7(5)
“the termination event”	12(12)
“the transfer instructions”	8(2)(h)
“the internal transfer instructions”	8(2)(i)