Exemption from tax of account income and gainsU.K.
24. Subject to compliance with these Regulations (and in particular regulation 9)—
(a)no tax shall be chargeable on the account provider or his nominee, or on the named child or registered contact (on his behalf)—
(i)in respect of interest, dividends, distributions or gains in respect of account investments,
(ii)on any annual profits or gains treated by section 714(2) of the Taxes Act M1 as having been received by any of them in respect of account investments,
(iii)on an offshore income gain to which a disposal made by any of them of an account investment gives rise, which is treated by section 761(1) of the Taxes Act as constituting profits or gains,
(iv)on a profit realised by any of them from the discount on a relevant discounted security within the meaning of Schedule 13 to the Finance Act 1996 M2, which is held as an account investment, or
(v)in respect of gains treated by section 541 of the Taxes Act as arising in connection with a policy of life insurance which is an account investment;
(b)losses accruing on any disposal of account investments shall be disregarded for the purposes of capital gains tax;
(c)section 349B(4) of the Taxes Act shall apply with the following modifications—
(i)for references to a plan manager, substitute references to an account provider,
(ii)for references to a plan, substitute references to an account, and
(iii)for the reference to section 333 of the Taxes Act, substitute a reference to the Act;
(d)a corresponding deficiency occurring at the end of the final year, within the meaning of section 549(1) of the Taxes Act, so far as it relates to a policy of life insurance which is an account investment, shall not be allowable as a deduction from the total income of the named child;
(e)relief in respect of tax shall be given in the manner and to the extent provided by these Regulations; and
(f)income arising from account investments shall not be regarded as income for any income tax purposes (including section 660B of the Taxes Act M3).
Marginal Citations
M21996 c. 8; paragraph 3 was substituted by section 65 of the Finance Act 1999 (c. 16).
M3Section 660B was inserted by paragraph 1 of Schedule 17 to the Finance Act 1995 (c. 4).