Citation, commencement and interpretation

1.-(1) These Regulations may be cited as the Social Security (Contributions) Amendment (No. 5) Regulations 1998 and shall come into force on 25th November 1998.

(2) In these Regulations "the principal Regulations" means the Social Security (Contributions) Regulations 1979(3).

Amendment of regulation 18 of the principal Regulations

2. In regulation 18 of the principal Regulations (calculation of earnings)-

(a)after paragraph (2)(4), insert-

"(2A) Paragraph (2) of this regulation shall apply to shares in a body corporate which are capable of being acquired pursuant to an option, or a voucher capable of being exchanged for such an option, where those shares, that option or that voucher are a readily convertible asset.

(2B) For the purposes of paragraphs (2A), (5A) and (9A) of this regulation, "body corporate" includes-

(a)a body corporate constituted under the law of a country or territory outside the United Kingdom; and

(b)an unincorporated association wherever constituted,

but does not include a partnership, a local authority within the meaning of section 842A of the Income and Corporation Taxes Act 1988(5) or a local authority association within the meaning of section 519(6) of that Act.";

(b)after paragraph (5)(7), insert-

"(5A) Paragraph (4)(8) of this regulation shall apply to shares in a body corporate which are capable of being acquired pursuant to an option, or a voucher capable of being exchanged for such an option, where those shares, that option or that voucher are a readily convertible asset.";

(c)in paragraph (9)(9), for "The amount", substitute "Subject to paragraphs (2A), (5A) and (9A) of this regulation, the amount";

(d)after paragraph (9), insert-

"(9A) Paragraph (9) of this regulation does not apply to an option to acquire shares in a body corporate, or a voucher capable of being exchanged for such an option, where those shares, that option or that voucher are a readily convertible asset.".

Explanatory Note

(This note is not part of the Regulations)

These Regulations further amend the Social Security (Contributions) Regulations 1979 ("the principal Regulations").

Regulation 2 amends regulation 18 of the principal Regulations by inserting new paragraphs. New paragraph (2A) provides that the provisions of paragraph (2) of regulation 18 of the principal Regulations shall apply to shares in a body corporate which are capable of being acquired pursuant to an option or a voucher exchangeable for such an option. New paragraph (2B) makes consequential provision for new paragraphs (2A), (5A) and (9A). New paragraph (5A) provides that the provisions of paragraph (4) of regulation 18 of the principal Regulations shall apply to shares in a body corporate which are capable of being acquired pursuant to an option or a voucher exchangeable for such an option. New paragraph (9A) excludes an option to acquire shares in a body corporate or a voucher exchangeable for such an option from the operation of paragraph (9) of regulation 18 of the principal Regulations.

These Regulations impose no costs on business.