The Taxation of Equitable Life (Payments) Order 2011

EXPLANATORY NOTE

(This note is not part of the Order)

This Order makes provision for payments which the Treasury authorise in cases where persons have been adversely affected by maladministration in the regulation before December 2001 of the Equitable Life Assurance Society. It provides for authorised payments to be disregarded, to the extent described in the Order, for the purposes of liability to tax and entitlement to tax credits.

Article 1 provides for citation and commencement and defines “authorised payment” as a payment to which section 1 of the Equitable Life (Payments) Act 2010 (c. 34) applies.

Articles 2, 3 and 4 provide respectively that an authorised payment is disregarded for the purposes of capital gains tax, the Corporation Tax Acts and the Income Tax Acts.

Article 5 provides that any value attributable to rights to, or interests in, an authorised payment that is made after a person’s death is disregarded in calculating the value of the person’s estate which is subject to inheritance tax on their death, and that such rights or interests are similarly disregarded in calculating the value of relevant property subject to a ten-year anniversary charge for inheritance tax, where an authorised payment is made on or after such anniversary.

Article 6 provides that in calculating investment income for the purposes of entitlement to tax credits an authorised payment shall be disregarded.

A full and final Impact Assessment has not been produced for this instrument as a negligible impact on the private or voluntary sectors is foreseen.