Explanatory note

These Regulations are made under sections 482(11) and 482A of the Income and Corporation Taxes Act 1988 (“the 1988 Act”) and come into force on 30th January 1992. They provide firstly for the furnishing of information to, and inspection of documents by, the Board in connection with payments of interest made by deposit-takers without deduction of tax in respect of deposits which are not relevant deposits by reason of section 481(5) of the 1988 Act.

Secondly, theRegulations provide that the Board’s powers referred to above to require information to be furnished and documents to be inspected shall not apply to a payment of interest made in respect of a deposit which is not a relevant deposit by reason of a declaration made to a deposit-taker under section 481(5) (k) of the 1988 Act and which is held by a deposit-taker who is approved by the Board. A declaration under section 481(5) (k) of the 1988 Act is to the effect that the person beneficially entitled to the interest in respect of the deposit is not ordinarily resident in the United Kingdom.

Thirdly, the Regulations provide for the conditions which are required to be satisfied in order for a deposit-taker to be approved by the Board. Essentially the conditions are that the Board are satisfied that the deposit-taker will observe certain procedures for monitoring whether deposits of the kind referred to in the preceding paragraph continue not to be relevant deposits, and the deposit-taker undertakes to instruct an auditor to carry out a periodical audit in respect of those procedures and deposits and to furnish a report on each audit to the Board.

Fourthly, the Regulations provide for the cirucmstances in which approval of a deposit-taker may be terminated or the scope of approval altered, for appeals against refusal, termination or alteration of approval, and for the consequences of such termination or alteration.

Regulation 1 provides for citationand commencement.

Regulation 2 contains definitions.

Regulation 3 provides for information, including copies of documents, to be furnished to the Board in connection with payments of interest made by deposit-takers without deduction of tax in respect of deposits which are not relevant deposits and are not excluded deposits within the meaning given by regulation 5.

Regulation 4 provides for inspection by the Boardof copies of documents which may be required to be furnished to the Board under regulation 3.

Regulation 5 provides that an “excluded deposit” is a deposit which is not a relevant deposit by reason of a declaration made pursuant to section 481(5)(k) of the 1988 Act (supported by a certificate where required) and which is held by a deposit-taker approved by the Board.

Regulation 6 specifies conditions which are required to be satisfied in order for a deposit-taker to be approved by the Board, including an agreement by the deposit-taker to instruct an auditor to carry out an audit in respect of the excluded deposits and to furnish a report in respect of that audit to the Board.

Regulation 7 specifies the nature of the audit, and the terms and conditions of the audit agreement, referred to in regulation 6.

Regulation 8 specifies the circumstances in which approval of a deposit-taker may be terminated by the Board or by the deposit-taker, and the date on which a termination takes effect.

Regulation 9 provides that the Board may alter the scope of their approval of a deposit-taker by withdrawing approval in certain circumstances from a branch of the deposit-taker or an otherwise identifiable part of the deposit-taker’s business, and provides for the date on which such alteration of approval takes effect.

Regulation 10 provides for a right of appeal against the Board’s refusal, termination or alteration of approval.

Regulation 11 specifies the consequences of termination or restriction of approval.

Regulation 12 specifies the purposes for which information obtained by the Board under regulation 3 or 4 may be used.