TAXES Citation, commencement and effect 1 These Regulations may be cited as the Stamp Duty Reserve Tax (Amendment) Regulations 1997, shall come into force on 20th October 1997, and shall have effect with respect to any relevant transaction entered into on or after that date. Interpretation 2 In these Regulations— “the Management Act ” means the Taxes Management Act 1970 ; “the principal Regulations ” means the Stamp Duty Reserve Tax Regulations 1986 ; “regulation” means a regulation of the principal Regulations; “relevant transaction” has the meaning given by regulation 2 of the principal Regulations; “the Schedule” means the Schedule to the principal Regulations. Amendments to the principal Regulations (other than the Schedule) 3 In regulation 2— a for the definition of “accountable date” there shall be substituted the following definition— “accountable date” means— in relation to a relevant transaction— in connection with which securities are transferred by means of a relevant system operated by the operator of that system, or which is reported by means of a relevant system to a recognised self-regulating organisation, a recognised professional body or an exchange by the operator of that system in a case where the securities to which the transaction relates are not transferred by means of a relevant system, or which is reported, otherwise than by means of a relevant system, to an exchange, in a case where the securities to which the transaction relates are not transferred by means of a relevant system, the date agreed between the Board and the operator or, if no such date is agreed, the date which is the fourteenth day following the date of the relevant transaction, in relation to interest on overdue tax arising in connection with a relevant transaction which, by virtue of a party to that transaction being a participant in a relevant system, or a member of an exchange, could have been, but was not, reported to a recognised self-regulating organisation, a recognised professional body or an exchange by means of that system, or to an exchange otherwise than by means of a relevant system, the date which is the fourteenth day following the date of the relevant transaction, and in relation to a relevant transaction to which neither paragraph (a) nor paragraph (b) applies, the date which is the seventh day of the month following the month in which the charge to tax occasioned by the relevant transaction is incurred; ; b for sub-paragraphs (i) and (ii) of paragraph (a) of the definition of “accountable person” there shall be substituted the following sub-paragraphs— i if the person mentioned as B in section 87(1) is a member of an exchange, or if a member of an exchange is acting as an agent for B who is not such a member, that member, and failing that ii if the person mentioned as A in section 87(1) is a member of an exchange, or if a member of an exchange is acting as an agent for A who is not such a member, that member, and failing that ; c after the definition of “barrister” there shall be inserted the following definitions— “the Board” means the Commissioners of Inland Revenue; “ EEA regulated market” means a market of a kind described in paragraphs (a) and (b) of article 2 of the Financial Services Act 1986 (EEA Regulated Markets) (Exemption) Order 1995 ; “exchange” means— a recognised investment exchange within the meaning given by section 207(1) of the Financial Services Act 1986 , or an EEA regulated market; ; d the definitions of “broker and dealer” and “market maker” shall be omitted; e after the definition of “notice” there shall be inserted the following definition— “operator” means— a person approved by the Treasury under the Treasury Regulations as Operator of a relevant system; subject to paragraph (c), where a relevant transaction is reported to an exchange otherwise than by means of a relevant system, the operator of that exchange or, if there is no such operator, that exchange; where a relevant transaction is reported to more than one exchange otherwise than by means of a relevant system, the operator of the exchange of which the party who is the accountable person in relation to that transaction is a member or, if there is no such operator, that exchange; ; f in the definition of “qualified dealer” — i for the words “market maker or broker and dealer” there shall be substituted the words “member of an exchange”; ii for paragraph (c) there shall be substituted— c is authorised under a legislative provision of the government of a territory outside the United Kingdom to carry on investment business, or d while not required to be authorised to do so, carries on investment business; ; g after the definition of “qualified dealer” there shall be inserted the following definitions— “recognised professional body” and “recognised self-regulating organisation” have the meanings given by section 207(1) of the Financial Services Act 1986; “relevant system” has the meaning given by regulation 2(1) of the Treasury Regulations; ; h after the definition of “tax” there shall be added the following definition— “the Treasury Regulations ” means the Uncertificated Securities Regulations 1995 . 4 In regulation 4(1) after the word “where” there shall be inserted the words “the tax in question has been accounted for by the operator under regulation 4A or where”. 5 After regulation 4 there shall be inserted the following regulation— 4A 1 An operator, except where different arrangements are authorised in writing by the Board, shall on or before the accountable date— a give notice to the Board of each charge to tax arising— i in respect of a relevant transaction in connection with which securities are transferred by means of a relevant system operated by him, or ii in respect of a relevant transaction that is reported to a recognised self-regulating organisation, a recognised professional body or an exchange by means of a relevant system operated by him, or iii in respect of a relevant transaction that is reported otherwise than by means of a relevant system to an exchange in relation to which he is the operator, or (as the case may be) which itself is the operator, in a case where the securities to which the transaction relates are not transferred by means of a relevant system, and b pay the tax due. 2 A notice under this regulation shall be in such form as the Board may prescribe or authorise and shall contain such information as they may reasonably require for the purposes of the Act. 3 The Board may, by notification in writing to an operator, impose such requirements, conditions or procedures as they consider necessary for the purposes of these Regulations. 6 In regulation 6— a in paragraph (1) after the words “accountable person” there shall be inserted the words “or, having regard to regulation 4A(1), the operator”; b in paragraph (4)(a) after the words “regulation 4” there shall be inserted the words “or 4A”. 7 In regulation 7— a after the words “accountable person” there shall be inserted the words “or an operator”; b after the words “regulation 4” there shall be inserted the words “or 4A”. 8 In regulation 8 , paragraphs (4A) and 4B), where they secondly occur, shall be renumbered as paragraphs (4C) and (4D) respectively of that regulation. 9 In regulation 13 — a in paragraph (1) there shall be added at the end the words “or 4A”; b in paragraph (2) after the words “regulation 4” there shall be inserted the words “or 4A”. 10 In regulation 15(1)— a after the words “accountable person” there shall be inserted the words “or operator”; b after the word “whenever” there shall be inserted the words “and wherever”. Amendments to Part I of the Schedule 11 1 The Table in Part I of the Schedule (which applies the provisions of the Management Act specified in the first column of that Table subject to any modification specified in the second column of that Table) shall be amended as follows. 2 For the entry relating to section 25(4) there shall be substituted the following entry— 4 For the words “stock exchange in the United Kingdom, other than a market maker,” substitute “recognised investment exchange or a market of the kind described in paragraphs (a) and (b) of article 2 of the Financial Services Act 1986 (EEA Regulated Markets) (Exemption) Order 1995 (“EEA regulated market”)”. 3 In the entry to section 25(5) for the words ““The Stock Exchange”” there shall be substituted the words ““a recognised investment exchange or an EEA regulated market””. 4 For the entries relating to section 93 there shall be substituted the following entries— 93 1 For the words “where” to “with the notice” substitute “where any person (the taxpayer) fails to give a notice which he is required to give under regulation 4 or 4A of the Stamp Duty Reserve Tax Regulations 1986”. 2 — 3 Omit the words “General or”. 5 For the words “to (4)” substitute “and (3)”; and for the words from “if” to the end substitute “if the failure by the taxpayer to give the notice continues after the end of a period of one year beginning on the last day on which the notice should have been given, he shall be liable to a penalty of an amount not exceeding the amount of the tax which he should have paid by the date by which he should have given the notice”. 6 —. 5 For the entry relating to section 95(1) there shall be substituted the following entry— 95 1 In paragraph (a) for the word “delivers” substitute “gives”; and for the words from “return” to “Act)” substitute “notice under regulation 4 or 4A of the Stamp Duty Reserve Tax Regulations 1986”; in paragraph (b) omit the word “return,”; for the words “in connection with” substitute “in, or in connection with,”; omit the words “for any allowance, deduction or relief”; and for the words “income tax or capital gains” substitute “stamp duty reserve”; omit paragraph (c) and the word “or” immediately preceding it. 6 In the entry relating to section 98 for the words “regulation 4” there shall be substituted the words “regulations 4 and 4A”. 7 In the entry relating to section 99 after the words “regulation 4” there shall be inserted the words “or 4A”. Amendments to Part II of the Schedule 12 1 Part II of the Schedule (which restates the provisions of the Management Act specified in Part I of the Schedule as modified where appropriate) shall be amended as follows. 2 For subsections (4) and (5) of section 25 (as modified) there shall be substituted the following subsections— 4 A member of a recognised investment exchange or a market of the kind described in paragraphs (a) and (b) of article 2 of the Financial Services Act 1986 (EEA Regulated Markets) (Exemption) Order 1995 (“EEA regulated market”) may be required to make a return giving particulars of any transactions effected by him in the course of his business in the period specified in the notice requiring the return and giving particulars of— a the parties to the transactions, b the number or amount of the shares or securities dealt with in the respective transactions, and c the amount or value of the consideration. 5 A person (other than a member of a recognised investment exchange or an EEA regulated market) who acts as an agent or broker in the United Kingdom in transactions in shares or securities may be required to make a return giving particulars of any such transactions effected by him in the period specified in the notice, and giving particulars of— a the parties to the transactions, b the number or amount of the shares or securities dealt with in the respective transactions, and c the amount or value of the consideration. 3 For section 93 (as modified) there shall be substituted the following section— 93 — 1 This section applies where any person (the taxpayer) fails to give a notice which he is required to give under regulation 4 or 4A of the Stamp Duty Reserve Tax Regulations 1986. 2 The taxpayer shall be liable to a penalty which shall be £100. 3 If, on an application made to them by an officer of the Board, the Special Commissioners so direct, the taxpayer shall be liable to a further penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which he is notified of the direction (but excluding any day for which a penalty under this subsection has already been imposed). 5 Without prejudice to any penalties under subsections (2) and (3) above, if the failure by the taxpayer to give the notice continues after the end of a period of one year beginning on the last day on which the notice should have been given, he shall be liable to a penalty of an amount not exceeding the amount of the tax which he should have paid by the date by which he should have given the notice. 6 No penalty shall be imposed under subsection (3) above in respect of a failure at any time after the failure has been remedied. Failure to give notice for stamp duty reserve tax. 4 For subsection (1) of section 95 (as modified) there shall be substituted the following subsection— 1 Where a person fraudulently or negligently— a gives any incorrect notice under regulation 4 or 4A of the Stamp Duty Reserve Tax Regulations 1986, or b makes any incorrect statement or declaration in, or in connection with, any claim in respect of stamp duty reserve tax, he shall be liable to a penalty not exceeding the amount of the difference specified in subsection (2) below. 5 In the Table in section 98 (as modified) for the words “regulation 4” there shall be substituted the words “regulations 4 and 4A”. 6 In section 99 (as modified) after the words “regulation 4” there shall be inserted the words “or 4A”. Jim Dowd Graham Allen Two of the Lords Commissioners of Her Majesty’s Treasury 8th October 1997