Citation and commencement

1. These Regulations may be cited as the Registered Pension Schemes (Prescribed Interest Rates for Authorised Employer Loans) Regulations 2005 and shall come into force on 6th April 2006.

Interpretation

2. —(1) In these Regulations—

“the operative date” means the sixth working day of each month;

“the reference date” is the twelfth working day preceding the operative date in the following month;

“working day” means a day which is not a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882( 2 ).

(2) In these Regulations the relevant interest rate found on a reference date is the percentage rate per annum found by the following steps.

• Step 1

  Find the average of the base lending rates of—

  (a)

  the Bank of Scotland;

  (b)

  Barclays Bank plc;

  (c)

  HSBC Bank plc;

  (d)

  Lloyds TSB Bank plc;

  (e)

  National Westminster Bank plc; and

  (f)

  the Royal Bank of Scotland plc.

• Step 2

  If the amount found by step 1 is a multiple of ¼%, that is the relevant interest rate.

  If the amount found by step 1 is not such a multiple, round the amount up to the nearest amount which is such a multiple.

Prescribed rate of interest for the purposes of section 179 of the Finance Act 2004

3. —(1) For the purposes of section 179 of the Finance Act 2004 (authorised employer loans) the prescribed rate of interest is found in accordance with paragraph (2).

(2) The prescribed rate applicable for the period beginning on one operative date and ending on the day preceding the next operative date is the percentage rate found by the formula—