NIM06822 | Class 1 NICs: Securities: Meaning of securities

Regulation 1(2) of the Social Security (Contributions) Regulations 2001

Securities have the meaning given in section 420 of the Income Tax (Earnings and Pensions) Act 2003 which defines them as:

(a) shares in a body corporate (wherever incorporated) or in any unincorporated body constituted under the law of a country or territory outside the UK;

(aa) rights under contracts of insurance other than excluded contracts of insurance - with effect from 2 December 2004;

(b) debentures, debenture stock, loan stock, bonds, certificate of deposit, and other instruments creating indebtedness (other than contracts of insurance);

(c) warrants and other instruments entitling their holders to subscribe for securities (whether or not in existence or identifiable);

(d) certificates and instruments conferring rights in respect of securities held by persons other than the persons on whom the rights are conferred and the transfer of which may be affected without the consent of those persons;

(e) units in a collective investment scheme;

(f) options and futures - options with effect from 2 December 2004;

(g) rights under contracts for differences or contracts similar to contracts for differences (other than contracts of insurance);

(h) arrangements falling within section 48A of the Finance Act 2005 (alternative finance arrangements: alternative finance investment bond) - with effect from 14 August 2007

For the purposes of subsection(aa) a contract of insurance is an excluded contract of insurance if it is:

(a) a contract for an annuity which is (or will be) pension income;

(b) a contract of long-term insurance, other than an annuity contract, which does not have a surrender value and is not capable of acquiring one (whether on conversion or in any other circumstances); or

(c) a contract of general insurance other than one which falls, in accordance with generally accepted accounting practice, to be accounted for as a financial asset or liability.