Finance Act 1991

47Investor protection schemes

(1)In section 76 of the Taxes Act 1988, in subsection (7) (which treats certain levies as expenses of management of insurance companies) after the word “under” there shall be inserted “(a)” and after the words “Policyholders Protection Act 1975” there shall be inserted the words “or

(b)a levy imposed in pursuance of a scheme established by rules under section 54 of the 1986 Act (compensation fund for unsatisfied claims),”.

(2)After that subsection there shall be inserted—

“(7A)The Treasury may by regulations make provision for any sums paid by a company under a prescribed levy imposed under a prescribed investor protection scheme established under the rules of a prescribed recognised self-regulating organisation to be treated for the purposes of this section as part of the company’s expenses of management; and, without prejudice to the generality of the foregoing, regulations under this subsection may, in particular—

(a)provide for only a prescribed part of any sums so paid to be so treated;

(b)provide for sums paid before, as well as after, the coming into force of the regulations to be so treated; and

(c)make different provision for different cases or in relation to different levies, schemes or organisations.”

(3)For subsection (8) of that section (definitions) there shall be substituted—

“(8)In this section—

• “the 1986 Act” means the [1986 c. 60.] Financial Services Act 1986;

• “acquisition expenses” means expenses falling within paragraphs (a) to (c) of subsection (1) of section 86 of the [1989 c. 26.] Finance Act 1989;

• “authorised person” has the same meaning as it has in the 1986 Act by virtue of section 207(1) of that Act;

• “investment business” has the same meaning as it has in the 1986 Act by virtue of section 1(2) of that Act;

• “investor” includes a person who is an investor for the purposes of the 1986 Act;

• “investor protection scheme” means a scheme established under the rules of a recognised self-regulating organisation for purposes which consist of or include the compensating of investors in cases where persons, or persons of some class or description, who are or have been authorised persons, are, or are likely to be, unable to satisfy claims in respect of any description of civil liability incurred by them in connection with their investment businesses;

• “prescribed” means specified in regulations made by the Treasury under subsection (7A) above;

• “recognised self-regulating organisation” has the same meaning as it has in the 1986 Act;

and other expressions have the same meaning as in Chapter I of Part XII.”

(4)The amendments made by subsection (1) above shall have effect in relation to levies imposed, and sums paid, before or after the coming into force of that subsection.