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Statutory Instrument 2003 No.3297The Reporting of Savings Income Information Regulations 2003(The document as of February, 2008. Arhiv.Online Library) STATUTORY INSTRUMENTS2003 No.3297TAXESThe Reporting of Savings Income Information Regulations 2003
The Treasury, in exercise of the powers conferred upon them by section 199 of the Finance Act 2003[1], make the following Regulations: Citation and commencement 1. - (1) These Regulations may be cited as the Reporting of Savings Income Information Regulations 2003. (2) These Regulations shall come into force on such date, being not earlier than 1st January 2005, as is determined by the Treasury and specified by notices in the London, Edinburgh and Belfast Gazettes. Interpretation 2. - (1) In these Regulations -
(2) In these Regulations -
(b) by the transfer of a right to settlement under a debt which is itself a money debt, subject to the qualification in regulation 17;
(3) For the purposes of these Regulations a person makes savings income payments to another person if the person -
(b) secures the payment of savings income for the other person. Meaning of paying agent
(b) makes savings income payments in the course of his business or profession; and (c) makes those payments -
(ii) to a residual entity established in a prescribed territory. Here a "person" includes any officer in any public office or in any government department and any savings income payments made by such a person will be treated as if the payment were made in the course of that person's business or profession.
(b) the profits of which are taxed under the general arrangements for business taxation; or (c) which is a UCITS authorised in accordance with the UCITS Directive. (2) In paragraph (1)(a) a legal person excludes -
(b) in Sweden, handelsbolag (HB) and kommanditbolag (KB). (3) A paying agent shall regard an entity as a residual entity unless the paying agent has reason to believe, on the basis of official evidence produced by the entity to the paying agent, that sub-paragraph (a), (b) or (c) of paragraph (1) applies.
(b) where the notice is given on behalf of the entity, the name, address and position of the person giving notice; (c) a statement that -
(ii) the entity is not a legal person; (iii) the entity's profits are not taxed under the general arrangements for business taxation; (iv) the entity is not a UCITS authorised in accordance with the UCITS Directive; and (v) the entity elects to be treated as if it were a UCITS authorised in accordance with the UCITS Directive for the purposes of the Savings Directive; and (d) a signed and dated declaration by the person giving notice to the effect that it is to the best of his knowledge correct and complete. (4) The Inland Revenue will issue a certificate to that entity confirming that it is to be treated as if it were a UCITS authorised in accordance with the UCITS Directive for the purposes of the Savings Directive and that certificate shall have effect from the date specified in that certificate.
(b) which is established in the United Kingdom; and (c) to which a savings income payment is made for the benefit of a relevant payee by a person established in a member State in the course of his business or profession. Meaning of relevant payee
(b) who has received a savings income payment or for whom a savings income payment has been secured, unless he provides evidence to the agent that the payment is not received or secured for his own benefit because of one of the reasons listed in paragraph (2).
(b) acts on behalf of a residual entity; (c) acts on behalf of an entity -
(ii) the profits of which are taxed under the general arrangements for business taxation; (iii) which is a UCITS authorised in accordance with the UCITS Directive; or (iv) which is treated as being a UCITS in accordance with the UCITS Directive for the purposes of the Savings Directive by virtue of Article 4(3); or (d) acts on behalf of another individual for whose benefit the payment is received or secured. (3) An individual who provides evidence that he is acting on behalf of a residual entity must in addition provide the name and address of that residual entity to the agent.
(b) interest accrued or capitalised at the sale, refund or redemption of a money debt; (c) income distributed by a collective investment fund which is derived directly or indirectly, via other collective investment funds or residual entities, from interest; (d) income realised upon the sale, refund or redemption of shares or units in a collective investment fund if that fund invests directly or indirectly, via other collective investment funds or residual entities, more than 40% of its assets in money debts. (2) In paragraph (1) "interest" -
(ii) premiums and discounts derived from money debts; (iii) any dividend derived from shares (including permanent interest bearing shares) in a building society; and (iv) any share interest paid by a registered industrial and provident society; and (b) excludes -
(ii) penalty charges for late payment. (3) In respect of savings income described in paragraph (1)(b), where an agent has no information concerning the amount of interest which is accrued or capitalised at the sale, refund or redemption of a money debt the total amount of the proceeds of the sale, redemption or refund is savings income.
(b) where a collective investment fund -
(ii) the collective investment fund has invested 15% or less of its assets in money debts in accordance with the law of that member State in the application of that derogation, there is no savings income. (6) In respect of savings income described in paragraph (1)(d) -
(b) where the agent cannot determine the amount of income realised by the relevant payee, the income shall be deemed to correspond to the proceeds of the sale, refund or redemption of the shares or units. (7) From 1st January 2011 paragraphs (1)(d) and (6)(a) shall have the effect with the substitution of "25%" for "40%".
(b) where a residual entity -
(ii) the residual entity has invested 15% or less of its assets in money debts in accordance with the law of that member State in the application of that derogation, there is no savings income. (9) In the application of paragraphs (5) and (8), where the agent cannot ascertain whether or not the collective investment fund or residual entity, as appropriate, has invested 15% or less of its assets in money debts in accordance with those provisions, there is savings income.
(b) an entity which is treated as being a UCITS authorised in accordance with the UCITS Directive for the purposes of the Savings Directive by virtue of Article 4(3); or (c) an undertaking for collective investment established outside the Community. This is subject to the following qualification.
Identity and residence of relevant payees 9. - (1) Where -
(b) a receiving agent receives or secures a savings income payment for an individual whom he believes to be a relevant payee, the agent must establish the identity and country of residence of that individual in accordance with this regulation.
(b) the country of residence of the individual in accordance with paragraphs (8) and (9). (5) The information in paragraph (4)(a) shall be verified by the presentation by the individual of his passport or official identity card to the agent.
(b) if the individual fails to present such a certificate, the member State that issued the passport or other official identity document shall be considered to be the country of residence. (10) The individual may present a certified copy of any of the documents referred to in this regulation.
Information to be reported to the Inland Revenue by paying agents making payments to relevant payees
(b) the name, address and country of residence of the relevant payee established in accordance with regulation 9; (c) where contractual relations between the relevant payee and the paying agent were entered into, or transactions are carried out in the absence of contractual relations, on or after 1st January 2004, the tax identification number, or if it is not available, the relevant payee's date and place of birth, established in accordance with regulation 9; (d) the account number of the relevant payee or, where there is none, identification of the money debt or other instrument giving rise to the savings income; (e) the amount and category of the savings income payments made to the relevant payee in accordance with regulation 13 and the currency in which they were paid. Information to be reported to the Inland Revenue by paying agents making payments to residual entities
(b) the name and address of the residual entity (including the territory in which it is established); and (c) the total amount and category of the savings income payments made to the residual entity in accordance with regulation 13 and the currency in which they were paid. Information to be reported to the Inland Revenue by receiving agents
(b) the name and address of the receiving agent; (c) the name, address and country of residence of the relevant payee established in accordance with regulation 9; (d) where contractual relations between the relevant payee and the receiving agent were entered into, or transactions are carried out in the absence of contractual relations, on or after 1st January 2004, the tax identification number, or if it is not available, the relevant payee's date and place of birth, established in accordance with regulation 9; (e) the account number of the relevant payee or, where there is none, identification of the money debt or other instrument giving rise to the savings income; (f) the amount and category of the savings income received or secured by the receiving agent in accordance with regulation 13 and the currency in which it was paid. The amount of savings income to be reported to the Inland Revenue
(b) sub-paragraph (b) or (d) of regulation 8(1), report either the amount of savings income or the full amount of the proceeds from the sale, redemption or refund; (c) regulation 8(1)(c), report either the amount of savings income or the full amount of the distribution. (3) Where the agent has reported savings income under sub-paragraph (a) or (c) of paragraph (2) no further report of the same savings income is required under sub-paragraph (b) of that paragraph. Paying and receiving agents to notify the Inland Revenue of reportable payments 14. - (1) An agent who must report information to the Inland Revenue in accordance with these Regulations must notify the Inland Revenue in writing that he needs to make a report within 14 days of the end of the tax year in which -
(b) in the case of a receiving agent, the savings income was secured or received, unless the agent has already received a notice under regulation 15 from the Inland Revenue in respect of that tax year.
(b) any person the Inland Revenue considers should have notified it in accordance with regulation 14(1) but has not done so; and (c) any person who has notified the Inland Revenue in accordance with regulation 14(1) in respect of a previous tax year, unless -
(ii) an officer of the Inland Revenue has reasonable grounds to believe, that he is no longer an agent. (2) The notice must specify -
(b) the tax year in respect of which the report must be made and that the report must be in respect of all savings income payments for that tax year; (c) the form in which the report must be made; (d) the address to which the report must be delivered; and (e) the date by which the report must be delivered which shall be a date no earlier than 30 days after the date of the notice. (3) For the report for the tax year in which the commencement date falls, the reference to the tax year in paragraph (2)(b) means the period beginning on the commencement date and ending at the end of the tax year in which the commencement date falls. Audit and related issues 16. - (1) An officer of the Inland Revenue may by notice require an agent, or a person who appears to the Revenue to be an agent, to furnish them within such time, not being less than 14 days, as may be provided by the notice, such information (including copies of any relevant books, documents or other records) as they may reasonably require for the purposes of determining whether information contained in a report under these Regulations by that agent or person, as appropriate, was correct and complete. (2) An agent or person, as appropriate, required to make and deliver a report under these Regulations shall, whenever required to do so within the period specified in paragraph (4)(c), make available for inspection by an officer of the Inland Revenue, at such time as that officer may reasonably require, all such copies of books, documents or other records in his possession or under his control as may be required by an officer of the Inland Revenue under paragraph (1). (3) An agent or person, as appropriate, required to make and deliver a report under these Regulations shall retain, for the period specified in paragraph (4), all such books, documents and other records copies of which he may be required to make available for inspection under paragraph (2). These documents include copies of the documents presented by relevant payees in accordance with regulation 9. (4) The period specified is -
(b) in relation to the official evidence referred to in regulation 4(3) the period of two years beginning immediately after the end of the tax year in which transactions between the residual entity and paying agent cease; and (c) in relation to information concerning savings income the period of two years beginning immediately after the end of the tax year to which the notice referred to in regulation 15(1) relates. (5) Paragraphs (3) and (4) are without prejudice to the following provisions -
(ii) regulation 12(2) of the Income Tax (Deposit-takers) (Interest Payments) Regulations 1990[13]; (iii) regulation 8 of the Income Tax (Deposit-takers) (Non-residents) Regulations 1992[14]; (iv) regulation 9 of the Income Tax (Authorised Unit Trusts) (Interest Distributions) Regulations 2003[15] including that regulation as modified by regulation 28(8) of the Open-ended Investment Companies (Tax) Regulations 1997[16]. (6) Subject to paragraph (7), information obtained by the Inland Revenue under this Regulation -
(ii) the person by whom the payment was made or received; and (b) shall otherwise be used only for the purposes of -
(ii) the provisions of Chapter 4 of Part 12 of the Income and Corporation Taxes Act 1988 relating to the deduction of tax from payments by building societies and deposit-takers, (iii) the Income Tax (Building Societies) (Dividends and Interest) Regulations 1990, (iv) the Income Tax (Deposit-takers) (Interest Payments) Regulations 1990, and (v) the Income Tax (Authorised Unit Trusts) (Interest Distributions) Regulations 2003 including these Regulations as modified by the Open-ended Investment Companies (Tax) Regulations 1997. (7) Paragraph (6) shall not be construed as preventing any disclosure of information under section 182(5) of the Finance Act 1989[17]. Transitional provisions - negotiable debt securities 17. - (1) Until 31st December 2010 negotiable debt securities to which paragraph (2) applies shall not be considered to be money debts. (2) This paragraph applies to negotiable debt securities -
(b) for which the original prospectus was approved before that date by -
(ii) the responsible authorities in third countries, provided that no further issues of such negotiable debt securities are made on or after 1st March 2002. (3) Where a further issue is made on or after 1st March 2002 of negotiable debt securities described in paragraphs (2)(a) and (b) issued by a Government or a related entity acting as a public authority or whose role is recognised by an international treaty, as defined in the Schedule, the entire issue of such security, consisting of the original issue and any further issue, shall be considered a money debt. For the purposes of regulation 17(3), an entity is "a related entity acting as a public authority or whose role is recognised by an international treaty" if it is listed in Table 1 or Table 2 below or it is situate in a third country and meets the following criteria -
(b) such public entity is a non-market producer which administers and finances a group of activities, principally providing non-market goods and services, intended for the benefit of the community and which are effectively controlled by general government; (c) such public entity is a large and regular issuer of debt; and (d) the State concerned is able to guarantee that such public entity will not exercise early redemption in the event of gross-up clauses. Table 1Entities within the European Union
Table 2International entities
Note: The provisions of regulation 17 are without prejudice to any international obligations that member States may have entered into with respect to the international entities listed in Table 2. (This note is not part of the Regulations) These Regulations implement part of Council Directive 2003/48/EC of 3rd June 2003 on taxation of savings income in the form of interest payments ("the Directive"), namely Articles 1 to 8, 15 and 17. The Regulations require information to be reported to the Inland Revenue about savings income paid to, or secured for, an individual resident in another member State in the course of a business or profession. The same is required in respect of some entities resident in other member States. Article 17(1) requires that regulations implementing the Directive be adopted and published before 1st January 2004. Article 17 of the Directive also provides for its commencement. Article 17(2) provides that for the Directive to apply from 1st January 2005 various arrangements between member States and other territories need to apply from that date. In accordance with Article 17(3), the Council will decide at least six months before 1st January 2005, whether this condition will be met. If it decides that it will not, it will adopt a new date on which the Directive will come into force provided that the condition will be met by that date. When the decision has been made the date of the commencement of these Regulations shall be notified in the London, Edinburgh and Belfast Gazettes. When arrangements between the other territories and member States are in place these Regulations will be amended to implement those arrangements. Part 1 of these Regulations makes provision for -
(ii) in respect of whom a report needs to be made; "relevant payees" and "residual entities"; and (iii) what is meant by "savings income". Part 1 also sets out how an entity can elect to be treated as if it were a UCITS, authorised in accordance with Council Directive 85/611/EEC, for the purposes of the Directive.
(ii) the information which needs to be reported to the Inland Revenue. Part 3 of these Regulations makes provision for -
(ii) notices to be sent out by the Inland Revenue in respect of the report to be made. Part 4 of these Regulations makes provision for audits and issues related to audits. Notes: [1]2003 c. 14.back [2]OJ No. L157, 26.06.2003, p.38.back [3]OJ No. L184, 06.07.2001, p.1, amended by Directive 2003/6/EC of the European Parliament and of the Council (OJ No. L96, 12.04.2003, p.16).back [4]OJ No. L375, 31.12.1985, p.3, amended by Council Directive 88/220/EEC (OJ No. L100, 19.04.1988, p.31), European Parliament and Council Directive 95/26/EC (OJ No. L168, 18.07.1995, p.7), European Parliament and Council Directive 2000/64/EC (OJ No. L290, 17.11.2000, p.27), European Parliament and Council Directive 2001/107/EC (OJ No. L41, 13.02.2002, p.20), European Parliament and Council Directive 2001/108/EC (OJ No. L41, 13.02.2002, p.35).back [5]1986 c. 53.back [6]1992 c. 12. Section 117(11) was amended by the Financial Services and Markets Act 2000 (Consequential Amendments)(Taxes) Order 2001 (S.I. 2001/3629).back [7]1988 c. 1.back [8]S.I. 1993/1933 and S.I. 2001/3641. Both these Regulations will be revoked and replaced by the Money Laundering Regulations 2003 (S.I. 2003/3075) on 1st March 2004.back [9]1970 c. 9. Section 100 was substituted by section 167 of the Finance Act 1989 (c. 26) and amended by the Finance Act 1990 (c. 29), the General and Special Commissioners (Amendment of Enactments) Regulations 1994 (S.I. 1994/1813), the Finance Act 1998 (c. 36) and the Finance Act 2001 (c. 9).back [10]1970 c. 9. Sections 100A, 100B and 103 were substituted, and section 102 amended, by the Finance Act 1989 (c. 26). Section 100B was amended by the General and Special Commissioners (Amendment of Enactments) Regulations 1994 (S.I. 1994/1813), the Finance Act 1994 (c. 9) and the Finance Act 1995 (c. 4). Section 118(2) was amended by the Finance Act 1970 (c. 24) and the Finance (No. 2) Act 1987 (c. 51).back [11]1970 c. 9. Section 17 was amended by the Finance Act 1988 (c. 36), the Finance Act 1990 (c. 29), the Finance (No.2) Act 1992 (c. 48), the Finance Act 1996 (c. 8) and the Finance Act 2000 (c. 17). Section 18 was amended by the Finance Act 1988 (c. 36), the Income and Corporation Taxes Act 1988 (c. 9), the Finance Act 1990 (c. 29) and the Finance Act 2000 (c. 17).back [12]S.I. 1990/2231, as amended by the Income Tax (Building Societies)(Dividends and Interest)(Amendment) Regulations 2001 (S.I. 2001/404).back [13]S.I. 1990/2232.back [14]S.I. 1992/14.back [15]S.I. 2003/1830.back [16]S.I. 1997/1154, as amended by the Open-ended Investment Companies (Tax)(Amendment) Regulations 2003 (S.I. 2003/1831).back [17]1989 c. 26. Section 182(5) was amended by the Tax Credits Act 1999 (c. 10).back ISBN0 11 048363 4 -- Back--
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