Finance (No. 2) Act 1992

65 Life assurance business: I minus E basis. U.K.

(1) For the purposes of this section a claim is a relevant claim if it is made under or by virtue of any of the following provisions—

(a) section 393(1) of the Taxes Act 1988 (claim for carry forward of trading losses);

(b) section 393A(1) of the Taxes Act 1988 (claim for carry sideways and backwards of trading losses);

(c) section 402(2) of the Taxes Act 1988 (surrender of relief between members of groups and consortia: group claim);

(d) section 402(3) of the Taxes Act 1988 (surrender of relief between members of groups and consortia: consortium claim);

(e) any provision reproduced in any of the provisions mentioned in paragraphs (a) to (d) above (whether directly or indirectly and whether with or without modification).

(2) For the purposes of this section the following are relevant provisions—

(a) section 434(2) of the Taxes Act 1988 (profits derived from investments of life assurance fund treated as profits of life assurance business in ascertaining loss on that business);

(b) section 715(1)(a) of the Taxes Act 1988 (special treatment of transfer of securities with or without accrued interest not to apply to transferor where transfer falls to be taken into account in computing profits or losses of trade);

(c) section 715(2)(a) of the Taxes Act 1988 (special treatment of transfer of securities with or without accrued interest not to apply to transferee where transfer falls to be taken into account in computing profits or losses of trade);

(d) section 83(1) of the M1 Finance Act 1989 (investment income etc. from assets of long-term business fund taken into account as receipts of life assurance business);

(e) section 37(1) of the M2 Taxation of Chargeable Gains Act 1992 (exclusion from consideration for disposal of asset of any money or moneys worth taken into account in computing profits or losses etc.);

(f) any provision reproduced in any of the provisions mentioned in paragraphs (a) to (c) and (e) above (whether directly or indirectly and whether with or without modification).

(3) For the purposes of this section—

(a) the I minus E basis is the basis commonly so called (under which a company carrying on life assurance business is charged to tax in respect of that business otherwise than under Case I of Schedule D);

(b) life assurance business includes annuity business.

(4) Neither the making of a relevant claim in respect of a trading loss incurred by a company in an accounting period nor the application of any commercial or accounting principle or practice in computing that loss—

(a) shall prevent the I minus E basis being applied for that or any other accounting period in respect of the company’s life assurance business;

(b) shall affect the calculation of the income or gains of that business for that or any other accounting period in applying that basis.

(5) The application of a relevant provision as regards a company for an accounting period shall not—

(a) prevent the I minus E basis being applied for that or any other accounting period in respect of its life assurance business;

(b) affect the calculation of the income or gains of that business for that or any other accounting period in applying that basis.

(6) This section—

(a) shall apply in relation to accounting periods beginning on or after the day on which this Act is passed;

(b) shall apply and be deemed always to have applied in relation to accounting periods beginning before that day[F1 but, in relation to any case in which by virtue of section 99 of the Finance Act 1990 losses may be set off under subsection (1) of section 393 of the Taxes Act 1988 without the making of a claim, this section shall have effect as if references to the making of a claim under that subsection were references to the setting off of any loss under that subsection.]

Textual Amendments

F1 Words in s. 65(6) inserted (27.7.1993) by 1993 c. 34, s. 120, Sch. 14 para.9

Marginal Citations

M1 1989 c. 26.

M2 1992 c. 12.