Finance Act 1989

Section 84.

SCHEDULE 8 U.K. Amendments of Chapter I of Part XII of Taxes Act 1988 (InsuranceCompanies)

1 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1

Textual Amendments

F1 Sch. 8 paras. 1, 3(3), 7 repealed by Finance Act 1990 (c.29), s. 132, Sch. 19 Pt. IV, Notes 6, 14

2 U.K. Section 433 (profits reserved for policy holders or annuitants) shallcease to have effect.

3 (1) In section 434 (franked investment income etc.), for subsection (3) thereshall be substituted the following subsections— U.K.

“(3) Subject to sections 437 and 438, the policy holders’ fraction of thefranked investment income from investments held in connection with a company’slife assurance business shall not be used under Chapter V of Part VI to frankdistributions made by the company and, accordingly, for the purposes of thatChapter (other than the application of franked investment income under section241), in relation to any unrelieved income of a company falling withinsubsection (1) above, the surplus of franked investment income for anyaccounting period means the aggregate of—

(a) the policy holders’ fraction of that franked investment income; and

(b) the amount determined under section 241(3) on the basis that the referencetherein to franked investment income is a reference only to the shareholders’fraction of that income.

(3A) The policy holders’ fraction of the franked investment income frominvestments held in connection with a company’s life assurance business shallbe left out of account in determining, under subsection (7) of section 13, thefranked investment income forming part of the company’s profits for thepurposes of that section.”

(2) Subsections (4) and (5) of that section shall be omitted.

(3)

F2 (4) In subsection (7) of that section for “(4)” there shall besubstituted “(3)” and after the words “against which” there shallbe inserted “disregarding relief under section 242”.

Textual Amendments

F2 Sch. 8 paras. 1, 3(3), 7 repealed by Finance Act 1990 (c.29), s. 132, Sch. 19 Pt. IV, Notes 6, 14

4 After section 434 there shall be inserted the following section—

“434A Limitations on loss relief and group relief.

“434A (1) In the case of a company carrying on life assurance business, no reliefshall be allowable under Chapter II (loss relief) or Chapter IV (group relief)of Part X against the policy holders’ fraction of the relevant profits for anyaccounting period.

(2) For the purposes of subsection (1) above, the relevant profits of acompany for an accounting period are the total profits of its life assurancebusiness, less any deduction due under section 76, but before allowing anyrelief under Chapter II or Chapter IV of Part X.”

5 U.K. Section 435 (taxation of gains reserved for policy holders and annuitants)shall cease to have effect.

6 U.K. In section 436 (annuity and pension business: separate charge on profits)in subsection (3)(a) for the words “section 433” there shall besubstituted “sections 82 and 83 of the Finance Act 1989”.

7 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F3

Textual Amendments

F3 Sch. 8 paras. 1, 3(3), 7 repealed by Finance Act 1990 (c.29), s. 132, Sch. 19 Pt. IV, Notes 6, 14