The Income Tax (Building Societies) (Dividends and Interest) (Amendment) Regulations 2005

Statutory Instruments

2005 No. 3474

INCOME TAX

The Income Tax (Building Societies) (Dividends and Interest) (Amendment) Regulations 2005

Made

16th December 2005

Laid before Parliament

19th December 2005

Coming into force

9th January 2006

The Commissioners for Her Majesty’s Revenue and Customs, in exercise of the powers conferred by section 477A(1) of the Income and Corporation Taxes Act 1988(1), and now exercisable by them(2), make the following Regulations:

Citation and commencement

1.  These Regulations may be cited as the Income Tax (Building Societies) (Dividends and Interest) (Amendment) Regulations 2005 and shall come into force on 9th January 2006.

Amendment to the Income Tax (Building Societies) (Dividends and Interest) Regulations 1990

2.—(1) Amend the Income Tax (Building Societies) (Dividends and Interest) Regulations 1990(3) as follows.

(2) In regulation 2 after paragraph (3) insert—

“(4) References in these Regulations to payments of interest in respect of an investment include alternative finance return and profit share return paid or credited under relevant arrangements.

(5) In paragraph (4)—

• “alternative finance return” shall be read in accordance with section 47(6) and (7) of the Finance Act 2005;

• “profit share return” has the meaning given in section 49(2) of the Finance Act 2005;

• “relevant arrangements” has the meaning given in paragraph 1 of Schedule 2 to the Finance Act 2005.”.

D. A. Hartnett

Paul R. C. Gray

Two of the Commissioners for Her Majesty’s Revenue and Customs

16th December 2005

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Income Tax (Building Societies) (Dividends and Interest) Regulations 1990 (S.I. 1990/2331) so that payments by building societies of alternative finance return or profit share return in relation to certain alternative finance arrangements (introduced by sections 46 to 57 of, and Schedule 2 to, the Finance Act 2005 (c. 7)) can be paid without deduction of tax.

This Order imposes no new costs on business.

(1)

1988 c. 1; section 477A was inserted by paragraph 4 of Schedule 5 to the Finance Act 1990 c. 29

(2)

The functions of the Commissioners of Inland Revenue (“the former Commissioners”) were transferred to the Commissioners for Her Majesty’s Revenue and Customs (“the new Commissioners”) by section 5 of the Commissioners for Revenue and Customs Act 2005 (c. 11). Section 50(1) provides that, so far as appropriate in consequence of section 5, references to the former Commissioners are to be read as references to the new Commissioners.

(3)

S.I. 1990/2231.