INCOME TAX Citation and commencement 1 These Regulations may be cited as the Debts of Overseas Governments (Determination of Relevant Percentage) Regulations 1990 and shall come into force on 11th December 1990. Interpretation 2 1 In these Regulations, unless the context otherwise requires– “the A, B and C factors” mean the factors so described in Schedule 1 to these Regulations; “debt” means a debt to which section 88A(2) of the Income and Corporation Taxes Act 1988 applies; “overseas State authority” has the same meaning as in section 88A(4) of the Income and Corporation Taxes Act 1988; “the principal section” means section 88B of the Income and Corporation Taxes Act 1988. 2 For the purposes of these Regulations a debt is connected with a State or territory– a in the case of a debt which is owed by, or payment of which is guaranteed by, an overseas State authority, when it is the State or territory by reference to which the overseas State authority is an overseas State authority; and b in the case of a debt due payment of which is or may be prevented, restricted or subject to conditions– i by virtue of any law of a State or other territory outside the United Kingdom or any act of an overseas State authority, or ii under any agreement entered into in consequence or anticipation of such a law or act, when it is the State or territory whose law it is or by reference to which the overseas State authority is an overseas State authority. Determination of relevant percentage 3 1 This regulation provides for the determination of the percentage of a debt by reference to the position at the end of a period of account of a company for the purposes of subsections (2) and (3) of the principal section. 2 Subject to paragraph (4), the percentage referred to in paragraph (1) shall be that given by Schedule 2 to these Regulations as corresponding to the number which is found by– a aggregating the numerical values (as adjusted where necessary in accordance with paragraph (5)) attributed by Schedule 1 to these Regulations to such of the A, B and C factors as are applicable at the end of the period of account in question in the case of the State or territory with which the debt is connected, b aggregating the values (as so adjusted) attributed to such of those factors as are so applicable at the end of each of the four consecutive periods of three months which end with the period ending three months before the end of the period of account in question, and c calculating the figure which results from dividing the aggregate of the values at the end of each of the periods referred to in sub-paragraphs (a) and (b) by the number of those periods and, if that figure is not a whole number, rounding it up to the next whole number. 3 Paragraph (4) applies where– a at the end of a period of account of a company, or b at the end of one of the four consecutive periods of three months which end with the period of three months before the end of a period of account of a company, (in paragraph (4) referred to as “the attributed value date”) it is found that a numerical value of ten or more is attributed for the first time by Schedule 1 to these Regulations in the case of the State or territory with which the debt is connected. 4 Where this paragraph applies– a for the purposes of the aggregation required by paragraph (2)(b) only those values shall be taken into account which are attributed to factors which are applicable in the case of the State or territory in question at the end of the consecutive periods of three months ending on or after the first attributed value date, and b for the purposes of the calculation required by paragraph (2)(c) only those periods shall be taken into account which end on or after the first attributed value date. 5 Where the aggregated numerical values attributed by Schedule 1 to these Regulations to such of the A, B and C factors as are applicable at the end of a period are less than 15, those values shall be adjusted by attributing to the C factors one half of the numerical values attributed by that Schedule in place of the values actually so attributed. Transitional provisions 4 1 In relation to the last period of account of a company ending before 20th March 1990, in regulation 3(2) sub-paragraphs (b) and (c) shall be omitted. 2 In relation to periods of account of the company– a ending on or after 20th March 1990 and before 20th June 1990, in regulation 3(2)(b) the words “each of the four consecutive periods of three months which end with” shall be omitted; b ending on or after 20th June 1990 and before 20th September 1990, in regulation 3(2)(b) for the word “four” there shall be substituted the word “two”; c ending on or after 20th September 1990 and before 20th December 1990, in regulation 3(2)(b) for the word “four” there shall be substituted the word “three”. 3 Where, in relation to a period of account of the company, regulation 3(2) applies as modified by paragraph (1) or (2), regulation 3(4) shall have effect as if the references in that paragraph to paragraph (2)(b) and (c) were to those sub-paragraphs as so modified. John Major Norman Lamont Two of the Lords Commissioners of Her Majesty’s Treasury 10th December 1990