Income and Corporation Taxes Act 1988

436 [F1 Pension business]: separate charge on profits. U.K.

(1) M1 Subject to the provisions of this section, profits arising to an insurance company from F2 . . . pension business shall be treated as income within Schedule D, and be chargeable under Case VI of that Schedule, and for that purpose—

(a) [F3 that business] shall be treated separately, and

(b) subject to paragraph (a) above, and to subsection (3) below, the profits therefrom shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.

(2) Subsection (1) above shall not apply to an insurance company charged to corporation tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its ordinary life assurance business.

(3) M2 In making the computation referred to in subsection (1) above—

(a) [F4 sections 82 and 83 of the Finance Act 1989] shall apply with the necessary modifications and in particular with the omission of all references to policy holders (other than holders of policies referable to pension business) [F5 and of the words “tax or” in section 82(1)(a)];

[F6 (aa) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(b) no deduction shall be allowed in respect of any expenses of management deductible under section 76; F8

(c) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from pension business F9 . . .in any previous accounting period or year of assessment;

(d) F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) M3 Section 396 shall not be taken to apply to a loss incurred by a company on its F11 . . . pension business.

(5) M4 Nothing in section 128 or 399(1) shall affect the operation of this section.

Textual Amendments

F1 Words in s. 436 sidenote substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 51(5) (with Sch. 8 para. 55(2))

F2 Words in s. 436(1) repealed (for accounting periods beginning on or after 1.1.1992) by Finance Act 1991 (c. 31, SIF 63:1), s. 48, 123, Sch. 7 paras. 4(1)(a), 18, Sch. 19 Pt.V Note 3

F3 Words in s. 436(1)(a) substituted (for accounting periods beginning on or after 1. 1. 1992) by Finance Act 1991 (c. 31, SIF 63:1), s. 48, Sch. 7 paras. 4(1)(b), 18

F4 1989 s.84and Sch.8 para.6and, subject to s.84(6)deemed to have come into force on 14March 1989.Previously

“section 433”.

F5 1990 s.43(2).Subject to 1989 s.84(6)this amendment has effect with respect to accounting periods beginning on or after 1January 1990.

F6 S. 436(3)(aa) inserted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 16(4) (with Sch. 8 para. 55(2))

F7 S. 436(3)(aa) repealed (with effect in accordance with Sch. 31 para. 10(2) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 31 para. 7(1)(a), Sch. 41 Pt. 5(23), Note

F8 Words repealed by 1989 ss.87(4)and 187and Sch.17 Part IVwith respect to accounting periods beginning on or after 1January 1990. (See 1989 s.87(5)in relation to straddling periods).

F9 Words in s. 436(3)(c) repealed (for accounting periods beginning on or after 1.1.1992) by Finance Act 1991 (c. 31, SIF 63:1), ss. 48, 123, Sch. 7 paras. 4(2)(a), 18 Sch. 19 Pt. V, Note 3

F10 S. 436(3)(d)(e) repealed (with effect in accordance with Sch. 3 para. 5(2) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 3 para. 5(1), Sch. 8 Pt. 2(6), Note

F11 Words in s. 436(4) repealed (for accounting periods beginning on or after 1.1.1992) by Finance Act 1991 (c. 31, SIF 63:1), ss. 48, 123, Sch. 7 paras. 4(3), 18, Sch. 19 Pt. V, Note 3

Modifications etc. (not altering text)

C1 S. 436 modified (with effect in accordance with reg. 1(2) of the modifying S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), regs. 1(1), 19, 20 (as amended by S.I. 2004/822, regs. 1, 12, 14)

C2 S. 436 modified (6.4.1999) by The Individual Savings Account (Insurance Companies) Regulations 1998 (S.I. 1998/1871), regs. 1, 5, 13

C3 S. 436 modified (6.4.1999) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), regs. 19A, 20A (as inserted by The Individual Savings Account (Insurance Companies) Regulations 1998 (S.I. 1998/1871), regs. 1, 25(3)(4), and as amended by S.I. 2004/822, regs. 1, 13, 15)

C4 See also 1989 s.43—certain Sch.D computations involving emoluments.

Marginal Citations

M1 Source—1970 s.312(1); 1970(F) Sch.5 Part III 11(3)

M2 Source—1970 s.312(2), 314(5); 1970(F) Sch.5 Part III 11(6)(a)(b); 1972 Sch.18 5(1)(a)

M3 Source—1970 s.312(3); 1970(F) Sch.5 Part III 11(3)

M4 Source—1985 s.72(7)