Policyholders Protection Act 1975

20 The exempt income level for the purposes of section 19

(1) For the purposes of section 19 above the exempt income level of an intermediary of a company for any year is—

(a) where no other person is linked with the intermediary, £5,000; and

(b) in any other case, that proportion of £5,000 which is equal to the proportion which the intermediary's income from the company in respect of relevant services for the year in question bears to the total amount of the group's income from the company in respect of such services for that year.

In paragraph (b) above " the group " means the intermediary together with the person or (where there are more than one) all of the persons linked with the intermediary.

(2) Where in a case falling within subsection (1)(b) above the income from the company in respect of relevant services for any year—

(a) of the intermediary ; and

(b) of each person linked with the intermediary;

did not exceed £1,000, no account shall be taken of that income for the purposes of section 19 above.

(3) The following are persons linked with an intermediary for the purposes of this section, whether the intermediary is a company or a person other than a company—

(a) any partner of the intermediary and any partnership of which the intermediary is a member;

(b) any company of which the intermediary is a director; and

(c) any director of any company which is linked with the intermediary.

(4) Where the intermediary in question is a company the following are also persons linked with the intermediary for the purposes of this section—

(a) any person other than a company who has a controlling interest in the intermediary, and any company other than the intermediary in which any such person also has a controlling interest;

(b) any company of which the intermediary is a subsidiary and any other subsidiary of any such company;

(c) any subsidiary of the intermediary ; and

(d) any director of the intermediary.

(5) Where the intermediary in question is a person other than a company the following are also persons linked with the intermediary far the purposes of this section—

(a) any company in which the intermediary has a controlling interest;

(b) any company of which a company linked with the intermediary by virtue of subsection (3)(b) or paragraph (a) above is a subsidiary and any other subsidiary of any such company;

(c) any subsidiary of any company linked with the intermediary by virtue of subsection (3)(b) or paragraph (a) above; and

(d) where the intermediary is a partnership, each of its members.

(6) A person other than a company shall be treated as having a controlling interest in a company for the purposes of subsections (4) (a) and (5) (a) above if, but only if, that company would be a subsidiary of the person in question if that person were a company.

(7) In determining for the purposes of subsection (6) above whether a company would be a subsidiary of any person other than a company, any shares held or power exercisable by either of two spouses or by both spouses jointly shall be treated as held or exercisable by each spouse.

(8) In subsections (3) to (7) above " company " has the same meaning as in section 154 of the Companies Act 1948 (meaning of " holding company " and " subsidiary ").