Explanatory note

These Regulations amend the Income Tax (Interest Relief) Regulations 1982 (S.I. 1982/1236) (“the principal Regulations”).

Regulation 8B of the principal Regulations (“regulation 8B”) enables the Commissioners of Inland Revenue to recover by way of assessment amounts paid in certain circumstances to a borrower under the mortgage interest relief at source (MIRAS) scheme to which that borrower is not entitled. Paragraph (3) of regulation 8B provides for the Taxes Management Act 1970 (“the 1970 Act”) to apply to any such assessment as if the assessment had various characteristics, identified by reference to specific provisions of the 1970 Act.

As a result of legislative amendments made by the Finance Act 1996 (c. 8), the references to specific provisions of the 1970 Act made by paragraph (3) of regulation 8B are no longer appropriate. These Regulations therefore provide substituted versions of that paragraph to accord with the amended legislation. Different provision is made for the cases specified in regulations 3(1) and 4(1) to take account of the differing amendments made by sub-paragraphs (5) and (6) of paragraph 17 of Schedule 18 to the Finance Act 1996.