Income and Corporation Taxes Act 1988

434 Franked investment income etc. U.K.

[F1 [F2 [F3 (1) Where an insurance company makes a payment representative of a distribution made by a company resident in the United Kingdom in respect of an asset of its long-term insurance fund, the payment is to be taken into account in computing its profits in accordance with the [F4 life assurance trade profits provisions] unless the amount taken into account in accordance with section 83(2)(a) of the Finance Act 1989 includes the amount of the payment.]]]

(2) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F6 (3) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3A) [F8 So much of the policy holders' share of the franked investment income from investments of a company’s long-term insurance fund as is referable to its] life assurance business shall be left out of account in determining, under [F9 section 32(1) of CTA 2010 (which relates to relief for small companies)], the franked investment income forming part of the company’s profits for the purposes of [F10 Part 3 of that Act].]

[F11 (3B) F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3C) F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3D) F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(4) M1 Subject to subsection (5)below, the specified part shall be, in the case of any unrelieved income, the same fraction of it as the fraction which, on a computation of the profits of the company in respect of its life assurance business in accordance with the provisions applicable to Case Iof Schedule D (whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods),would be connoted by the words in section 433 “such part of those profits as belongs or is allocated to, or is reserved for, or expended on behalf of, policy holders or annuitants”. F13

(5) If the income exceeds the profits as computed in accordance with the provisions applicable to Case Iof Schedule D other than section 433, the specified part shall be that fraction of the income so far as not exceeding the profits, together with the amount of the excess. F14

(6) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F15 (6A) For the purposes of this section—

(a) “the policy holders’ share” of any franked investment income is so much of that income as is not the shareholders’ share within the meaning of section 89 of the Finance Act 1989, F16 . . .

[F17 (aa) F18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ab) F18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ac) F18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(b) F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F1 S. 434(1) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 19(2) (with Sch. 8 para. 55(2))

F2 S. 434(1)-(1B) substituted for s. 434(1) (with effect in accordance with Sch. 3 para. 3(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 3 para. 3(2)

F3 S. 434(1) substituted for s. 434(1)(1B) (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 22(2) (with Sch. 7 Pt. 2)

F4 Words in s. 434(1) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 133 (with Sch. 2 Pts. 1, 2)

F5 S. 434(2)(7) repealed (with effect in accordance with Sch. 29 Pt. 8(5) Note 2 of the repealing Act) by Finance Act 1995 (c. 4), Sch. 29 Pt. 8(5)

F6 S. 434(3)(3A) substituted for s. 434(3) by Finance Act 1989 (c. 26), s. 84(4)-(6), Sch. 8 para. 3(1)

F7 S. 434(3)(6)(8) repealed (with effect in accordance with Sch. 3 para. 25(5)(6) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 25(2)-(4), Sch. 27 Pt. 3(2), Note

F8 Words in s. 434(3A) substituted (with effect in accordance with Sch. 33 para. 12(5) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 12(2)

F9 Words in s. 434(3A) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 45(a) (with Sch. 2)

F10 Words in s. 434(3A) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 45(b) (with Sch. 2)

F11 S. 434(3B)-(3D) inserted (3.5.1994) by Finance Act 1994 (c. 9), Sch. 16 para. 5(4)

F12 S. 434(3B)-(3D) repealed (with effect in accordance with Sch. 6 para. 3(4) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 6(2), Sch. 8 Pt. 2(11), Note

F13 Repealed by 1989 ss.84and 187and Sch.8 para.3(2)and Sch.17 Part IVwith respect to accounting periods beginning on or after 1January 1990.

F14 Repealed by 1989 ss.84and 187and Sch.8 para.3(2)and Sch.17 Part IVwith respect to accounting periods beginning on or after 1January 1990.

F15 1990 s.45(7).

F16 Word at the end of s. 434(6A)(a) repealed (3.5.1994) by Finance Act 1994 (c. 9), Sch. 16 para. 5(5), Sch. 26 pt. 5(16)

F17 S. 434(6A)(aa)-(ac) inserted (3.5.1994) by Finance Act 1994 (c. 9), Sch. 16 para 5(5)

F18 S. 434(6A)(aa)-(ac) repealed (with effect in accordance with Sch. 6 para. 6(4) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 6(3), Sch. 8 Pt. 2(11), Note

F19 S. 434(6A)(b) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 22(3), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

Modifications etc. (not altering text)

C1 S. 434 amended (27.7.1993) by 1993 c. 34, s. 78(6)(11)

C2 S. 434(3A) excluded by The Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175), reg. 3(5) (as substituted (11.8.2011 with effect in accordance with art. 1(2) of the amending S.I.) by The Corporation Tax (Instalment Payments) (Amendment) Regulations 2011 (S.I. 2011/1785), regs. 1(1), 4(8))

Marginal Citations

M1 Source—1970 s.310(6)