Joint Committee on Statutory Instruments Fourth Report


Memorandum by the Department of Social Security



The Committee has requested a memorandum on the following point relating to the Social Security (Contributions) Amendment (No.5) Regulations 1998 (S.I.1998/2894).

    Regulation 2 extends regulation 18 of the 1979 Regulations so as to bring into the requirement to compute beneficial interests as earnings (a) shares in bodies corporate capable of being acquired under option; and (b) vouchers capable of being exchanged for such options, where those interests are readily convertible assets. Excluded from this further requirement are interests in or in connection with a body corporate (as defined in new regulation 18(2B)) where that body is " a local authority within the meaning of section 842A of the Income and Corporation Taxes Act 1988 or a local authority association within the meaning of section 519 of that Act." Explain whether and how these (excluded) interest in practice arise in the local authority sector.

The Department accepts that in the context of this instrument the reference to local authorities and local authority associations is unnecessary: in practice there is no corporate body limited by shares which currently falls within the definition of "local authority" or a "local authority association" for the purposes of sections 842A and 519 of the Income and Corporation Taxes Act 1988 respectively.

The Department proposes to amend the provision at the next suitable opportunity.

14th December 1998

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