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).
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