Finance Act 2012

Taxation (International and Other Provisions) Act 2010 U.K.

232 U.K. TIOPA 2010 is amended as follows.

233 U.K. In section 43(7) (profits attributable to permanent establishments for purposes of section 42(2)), omit “(within the meaning given by section 431(2) of ICTA)”.

234 U.K. In section 72(2) (application of section 73(1)), omit paragraph (b) (together with the “or” before it).

235 U.K. In section 96(1) (companies with overseas branches: restriction of credit)—

(a) omit “or section 436A of ICTA”,

(b) omit “, calculated in accordance with the provisions applicable for the purposes of section 35 of CTA 2009,” and

(c) for “life assurance business or gross roll-up business” substitute “ non-BLAGAB long-term business ”.

236 U.K. For section 97 substitute—

“97 Companies with more than one category of business: restriction of credit

(1) This section applies if—

(a) an insurance company carries on more than one category of long-term business in an accounting period, and

(b) there arises to the company in that period any income or gain (“the relevant income”) in respect of which credit for foreign tax is to be allowed under the arrangements.

(2) The amount of the credit for foreign tax which, under the arrangements, is allowable against corporation tax in respect of so much of the relevant income as is referable, in accordance with Part 2 of FA 2012, to a particular category of business must not exceed the fraction of the foreign tax which, in accordance with subsection (3), is attributable to that category of business.

(3) The fraction of the foreign tax that is attributable to the category of business in question is the fraction given by—

where—

RPRI is the amount of the relevant income referable to the category of business in question in accordance with section 97A, and

TRI is the total amount of the relevant income.

97A Commercial allocation of relevant income to different categories of long-term business

(1) The amount of the relevant income that, for the purposes of section 97, is to be regarded as referable to a category of business is to be determined in accordance with an acceptable commercial method adopted by the company for the period of account in which the relevant income arises.

(2) A method is an “acceptable commercial method” if, in all the circumstances, it can reasonably be regarded as providing a fair method for the purposes of section 97 for determining for a period of account the amount of any income or gain arising in the period that is referable to a particular category of long-term business carried on by the company.

(3) The Treasury may make regulations for the purposes of this section—

(a) prescribing cases in which a method is, or is not, to be regarded as an acceptable commercial method, and

(b) prescribing cases in which the only acceptable commercial method is to be a method prescribed, or of a description prescribed, in the regulations.

(4) Subject to any provision made by regulations under subsection (3), the method adopted for the purposes of this section for a period of account must be consistent with the method adopted for the purposes of section 98 or 115 of FA 2012 for that period.”

237 U.K. Omit section 98 (attribution for section 97 purposes if category is gross roll-up business).

238 U.K. In section 99(7) (allocation of expense etc in calculations under section 35 of CTA 2009), for “98” substitute “ 97A ”.

239 U.K. Omit section 102 (interpreting sections 99 to 101 for life assurance or gross roll-up business).

240 (1) Section 103 (interpreting sections 99 to 101 for other insurance business) is amended as follows. U.K.

(2) In subsection (1), omit the words from “if” to the end.

(3) In the heading, omit “for other insurance business”.

241 U.K. In section 104(3) (interpreting sections 100 and 101: amounts referable to category of business), for “98” substitute “ 97A ”.

F1 242 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Sch. 16 para. 242 repealed (with effect in accordance with Sch. 5 para. 26(1) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 11(2)(c)(ii)

243 U.K. In section 310(2) (meaning of “carried-forward amount”)—

F2 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) omit paragraph (b).

Textual Amendments

F2 Sch. 16 para. 243(a) repealed (with effect in accordance with Sch. 5 para. 26(1) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 11(2)(c)(ii)

244 U.K. In Part 1 of Schedule 11 (index of defined expressions used in Parts 2 and 3 of Act), insert the following entries at the appropriate places—

“insurance company

section 65 of FA 2012 (as applied by section 141(2) of that Act)”

“long-term business

section 63 of FA 2012 (as applied by section 141(2) of that Act)”