Income and Corporation Taxes Act 1988

444AEA Transfer schemes: anti-avoidance rule U.K.

(1) This section applies where—

(a) as a result of the whole F1 . . . of transfer scheme arrangements involving the transfer of long-term business from one person (“the transferor”) to another (“the transferee”) a [F2 life assurance trade profits] advantage is obtained by the transferor or the transferee (or by both), and

(b) the sole or main purpose, or one of the main purposes, of the whole F1 . . . of the transfer scheme arrangements is the obtaining of that F3 . . . advantage.

(2) In subsection (1) above “transfer scheme arrangements” means an insurance business transfer scheme (“the relevant transfer scheme”) together with any relevant associated operations.

(3) If a [F4 life assurance trade profits advantage] is obtained by the transferor (see subsection (1) of section 444AEB), the amount of the F5 . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the [F6 long-term insurance fund of the transferor—

(a) to the extent that the advantage is obtained by the transferor in the period of account covering the transfer date or any earlier period of account—

(i) for the period of account of the transferor ending (or treated as ending) immediately before the transfer date, or

(ii) where there is no such period, for the period of account of the transferor including the transfer date, and

(b) to the extent that the advantage is obtained by the transferor in any later period of account of the transferor in which any relevant associated operations are effected, for that later period of account.]

(4) If a [F7 life assurance trade profits advantage] is obtained by the transferee (see subsection (1) of section 444AEC), the amount of the F8 . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the [F9 period of account of the transferee in which the advantage is obtained by the transferee].

(5) In this section and sections 444AEB [F10 to 444AECC]“relevant associated operations”, in relation to the relevant transfer scheme, means—

(a) any other insurance business transfer scheme,

(b) any contract of reinsurance,

(c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee, or

(d) any surplus-increasing transfer of assets,

which is effected in connection with the relevant transfer scheme.

(6) In subsection (5) above—

• “dependant” and “insurance undertaking” have the same meaning as in the Insurance Prudential Sourcebook, and

• “surplus-increasing transfer of assets” means a transfer of assets of the transferor's long-term insurance fund to the transferee which is not brought into account for any period of account of the transferee but increases the amount of total surplus shown in line 39 of Form 58 in any periodical return of the transferee.

(7) See section 444AA for the meaning of “the transfer date” in this section.

Textual Amendments

F1 Words in s. 444AEA(1)(a)(b) omitted (19.2.2008 with effect in accordance with art. 1(4) of the repealing S.I.) by virtue of The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 19(2)

F2 Words in s. 444AEA(1)(a) 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. 145(2)(a) (with Sch. 2 Pts. 1, 2)

F3 Words in s. 444AEA(1)(b) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 145(2)(b), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F4 Words in s. 444AEA(3) 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. 145(3)(a) (with Sch. 2 Pts. 1, 2)

F5 Words in s. 444AEA(3) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 145(3)(b), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F6 Words in s. 444AEA(3) substituted (19.2.2008 with effect in accordance with art. 1(4) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 19(3)

F7 Words in s. 444AEA(4) 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. 145(4)(a) (with Sch. 2 Pts. 1, 2)

F8 Words in s. 444AEA(4) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 145(4)(b), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F9 Words in s. 444AEA(4) substituted (19.2.2008 with effect in accordance with art. 1(4) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 19(4)

F10 Words in s. 444AEA(5) substituted (19.2.2008 with effect in accordance with art. 1(4) of the amending S.I.) by The Insurance Business Transfer Schemes (Amendment of the Corporation Tax Acts) Order 2008 (S.I. 2008/381), arts. 1(1), 19(5)