The Income Tax (Building Societies) (Dividends and Interest) (Amendment) Regulations 2001

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Income Tax (Building Societies) (Dividends and Interest) Regulations 1990 (S.I. 1990/2231) (“the principal Regulations”) in relation to payments of dividends and interest by building societies made on or after 6th April 2001, and certificates, notifications and declarations given or made for the purposes of the principal Regulations on or after that date.

Regulation 1 provides for citation, commencement and effect, and regulation 2 for interpretation.

Regulation 3 introduces regulations 4 to 15 which amend the principal Regulations.

Regulation 4 inserts definitions of “electronic communication” and “electronic signature” in the principal Regulations in consequence of the amendments made by regulations 6 and 7.

Regulation 5 adds another category of gross payment to regulation 4 of the principal Regulations, namely a payment of interest in respect of cash received by a building society in connection with an agreement for the sale and repurchase of securities.

Regulation 6 amends regulation 5 of the principal Regulations so as to make provision for cases where certificates of non-liability to tax are given otherwise than in writing.

Regulation 7 amends regulation 11 of the principal Regulations (declaration that the person beneficially entitled to a payment of a dividend or interest is not ordinarily resident in the United Kingdom) by adding to the terms of the declaration and making provision for cases where the declaration is made otherwise than in writing.

Regulations 8 to 11 amend regulation 12 of the principal Regulations by adding to the information required to be contained in a return under that regulation and specifying information that shall not be required to be contained in a return.

Regulation 12 inserts regulation 12A in the principal Regulations which provides for the form in which a return under regulation 12 of the principal Regulations is to be made and delivered.

Regulation 13 inserts regulation 14A in the principal Regulations which enables the Board of Inland Revenue (“the Board”) to require a building society to furnish information for the purposes of determining whether a return under regulation 12 of the principal Regulations was correct and complete.

Regulation 14 inserts regulations 15A and 15B in the principal Regulations which make provision for inspection of documents by an officer of the Board and for retention of documents by a building society.

Regulation 15 amends regulation 16 of the principal Regulations (use of information) in consequence of the regulations inserted in the principal Regulations by regulations 13 and 14.

The costs to building societies of the amendments made by these Regulations relating to the furnishing of information are set out in a Regulatory Impact Assessment entitled “Abolition of Withholding Tax on Bond Interest and Extension of Routine Information Powers on Savings Income”. A copy of this Regulatory Impact Assessment has been placed in the library of the House of Commons or may be obtained from Inland Revenue, International Division, Room 509B, Melbourne House, Aldwych, London WC2B 4LL, or from the Inland Revenue website at http://www.inlandrevenue.gov.uk.