The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 2004

Amendments to the Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997

7.  After regulation 7 insert—

“7A. In the case of a friendly society not required to keep a separate fund for long-term business, the following section shall be treated as inserted after section 431AA of the Taxes Act—

“Friendly societies: meaning of “long-term insurance fund”

431AB.— (1) “Long-term insurance fund” means the fund made up of—

(a) assets held primarily for the purposes of long-term business carried on by a friendly society, and

(b) the relevant fraction of each asset held neither primarily for the purposes of long-term business nor primarily for the purposes of some other specific business carried on by that society.

(2) For the purposes of subsection (1) “the relevant fraction” means—

Where—

OLB and CLB are respectively the balances brought forward and carried forward in the fund accounts for those accounts within which the society conducts its long-term business;

OLA and CLA are respectively the opening and closing values of the assets already recognised at the beginning and end of the period of account as held for the purposes of long-term business carried on by the society;

OTB and CTB are respectively the total balances brought forward and carried forward on all the society’s fund accounts; and

OTA and CTA are respectively the opening and closing values of the assets already recognised at the beginning and end of the period of account as held for the purposes of long-term business or for the purposes of other specific business carried on by the society.

(3) In calculating the values and balances for the purpose of determining the relevant fraction in subsection (2), a balance on a general management fund or a general reserve fund shall be excluded.

(4) In subsection (2), references to balances brought forward and carried forward are references to balances brought forward and carried forward as shown in the society’s periodical return.”.”.