Explanatory note

These Regulations make two amendments to the Income Tax (Stock Lending) Regulations 1989 (S.I. 1989/1299) (“the principal Regulations”) which specify the conditions which must be fulfilled before the tax reliefs conferred by section 129(3) of the Income and Corporation Taxes Act 1988 and section 271(9) of the Taxation of Chargeable Gains Act 1992 (c. 12) (“the tax reliefs”) are obtained.

The first amendment is to the definition of “other United Kingdom securities” in regulation 2(1) of the principal Regulations. The amendment removes an obsolete reference to the Third Market of the Stock Exchange, a market which closed on 31st December 1990, and substitutes a new reference to the Alternative Investment Market of the Stock Exchange which is to be opened for trading on 19th June 1995. Regulation 4(1) of the principal Regulations (as substituted by regulation 5 of S.I. 1993/2003) provides that the tax reliefs do not apply to stock lending arrangements relating to other United Kingdom securities unless the conditions specified in regulation 6 of the principal Regulations are fulfilled.

The second amendment, which is of a drafting nature, is to regulation 6A of the principal Regulations which specifies the conditions to be fulfilled where the transfer is of United Kingdom equity securities to members of the London International Financial Futures and Options Exchange.