INCOME TAX Citation and commencement 1 These Regulations may be cited as the Personal Equity Plan (Amendment) Regulations 1997 and shall come into force on 20th March 1997. Interpretation 2 In these Regulations “the principal Regulations ” means the Personal Equity Plan Regulations 1989 and “regulation” means a regulation of the principal Regulations. Amendments to the principal Regulations 3 1 In regulation 4(2) after the words “specified in” there shall be inserted the words “sub-paragraph (a), (b) or (c) of”. 2 In regulation 4(2A) for sub-paragraph (b) there shall be substituted— b in connection with the transfer of the whole of the business of a building society (“the society”) to a company which has share capital (“the successor company”) in accordance with section 97 and the other applicable provisions of the Building Societies Act 1986 shares in the successor company which satisfy the conditions prescribed by paragraph (2B) are allotted or allocated to the qualifying individual by virtue of his being at a relevant time a member of the society or an employee, former employee or pensioner of the society or of a company which is a wholly-owned subsidiary of the society— i in priority to other persons, or ii for consideration of an amount or value lower than the market price of the shares, or iii free; or c in connection with the transfer of the whole or part of the business of a mutual insurance company (“the mutual”) to a company which has share capital (“the acquiring company”) under a scheme to which Schedule 2C to the Insurance Companies Act 1982 applies, or (on the assumption, where it is not in fact the case, that the mutual is carrying on business through a branch in the United Kingdom) would apply but for section 15(1A) of that Act, shares in a company which is either the acquiring company or a company of which the acquiring company is a wholly-owned subsidiary, and which satisfy the conditions prescribed by paragraph (2B), are allotted or allocated to the qualifying individual by virtue of his being at a relevant time a member of the mutual or an employee, former employee or pensioner of the mutual or of a company which is a wholly-owned subsidiary of the mutual— i in priority to other persons, or ii for consideration of an amount or value lower than the market price of the shares, or iii free. 3 After regulation 4(2A) there shall be inserted— 2B The conditions prescribed by this paragraph are that the shares— a are qualifying investments for general plans or, as the case may be, single company plans, and b have not been allocated or appropriated to the qualifying individual in accordance with the provisions of an approved share option scheme or an approved profit sharing scheme. 2C In this paragraph and in paragraphs (2A) and (2B)— “employee” includes any officer or director of the building society or the mutual insurance company or of a company which is a wholly-owned subsidiary of the building society or the mutual insurance company and any other person taking part in the management of the affairs of the building society or the mutual insurance company or of a company which is a wholly-owned subsidiary of the building society or the mutual insurance company; “member”, in relation to a building society or a mutual insurance company, includes a person who is entitled to become a member; “mutual insurance company” means an insurance company carrying on business without having any share capital; “insurance company” has the meaning given in section 96 of the Insurance Companies Act 1982; “pensioner” means a person entitled (whether presently or prospectively) to a pension, lump sum, gratuity or other like benefit, which is referable to the service of any person as an employee of the building society or the mutual insurance company or of a company which is a wholly-owned subsidiary of the building society or the mutual insurance company; “a relevant time” means a time at which, under the arrangements described in sub-paragraph (b) or (c) of paragraph (2A), a person is required to be a member, employee, former employee or pensioner of the building society, mutual insurance company or company which is a wholly-owned subsidiary of the building society or mutual insurance company, in order to qualify for the allotment or allocation of shares on the terms set out in those sub-paragraphs; a company shall be deemed to be a “wholly-owned subsidiary” of a building society, a mutual insurance company or another company if and so long as all its ordinary share capital is owned directly or indirectly by that building society, mutual insurance company or other company and section 838 of the Taxes Act shall apply for construing what is meant by directly or indirectly owning ordinary share capital of a company. 4 In regulation 4(3) — a in sub-paragraph (aa) after the word “that” there shall be inserted “, in relation to shares referred to in paragraph (2A)(a),”; b in paragraph (i) of sub-paragraph (b) after the words “paragraph (2A)(b)” there shall be inserted the words “, any sum payable for such an allotment or allocation as is referred to in paragraph (2A)(c)”. 4 In regulation 4A(3)(c) after the words “regulation 4(2A)(b)” there shall be inserted the words “, any sum payable for such an allotment or allocation as is referred to in regulation 4(2A)(c)”. 5 In regulation 24A(3)(a)(i) after the words “ordinary shares” there shall be inserted the words “, not being shares in an investment trust,”. Richard Ottaway Patrick McLoughlin Two of the Lords Commissioners of Her Majesty’s Treasury 26th February 1997