Income and Corporation Taxes Act 1988

[F1 [F2 Basis of taxation etc]] U.K.

Textual Amendments

F1 Cross-heading before s. 432 inserted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 51(2) (with Sch. 8 para. 55(2))

F2 Ss. 431G, 431H and preceding cross-heading substituted for s. 432 and preceding cross-heading (with effect in accordance with s. 39(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 8 para. 4 (with Sch. 8 Pt. 2)

[F3 431G Company carrying on life assurance business U.K.

(1) This section applies in relation to an insurance company which carries on life assurance business (whether or not it also carries on insurance business of any other kind).

(2) Subject as follows, the profits of the life assurance business for any accounting period shall be charged to tax under the I minus E basis.

(3) Where in the case of an insurance company for an accounting period either—

(a) all of its life assurance business is reinsurance business and none of that business is of a type excluded from this subsection by regulations made by the Board, or

(b) all, or substantially all, of its life assurance business is gross roll-up business,

the profits of that business for the accounting period shall be charged to tax [F4 under section 35 of CTA 2009 (charge on trade profits)] and not otherwise.

(4) Where—

(a) the profits of the life assurance business of an insurance company for any accounting period are charged to tax under the I minus E basis, and

(b) had those profits been charged to tax [F5 under section 35 of CTA 2009], a loss would have arisen to the company from that business for the period,

the loss (after being reduced in accordance with section 434A(2)(a)) may be [F6 relieved under section 37 of CTA 2010 or under Chapter 4 of Part 5 of that Act].

(5) The application, in relation to the life assurance business of an insurance company, of any [F7 of the life assurance trade profits provisions] is not to be taken—

(a) to prevent the application of the I minus E basis in relation to that business of the company for any accounting period, or

(b) to affect the operation of the I minus E basis in relation to the that business of the company for any accounting period except as specifically provided by the Corporation Tax Acts.]

Textual Amendments

F3 Ss. 431G, 431H and preceding cross-heading substituted for s. 432 and preceding cross-heading (with effect in accordance with s. 39(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 8 para. 4 (with Sch. 8 Pt. 2)

F4 Words in s. 431G(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. 127(2) (with Sch. 2 Pts. 1, 2)

F5 Words in s. 431G(4)(b) 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. 127(3) (with Sch. 2 Pts. 1, 2)

F6 Words in s. 431G(4) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 42 (with Sch. 2)

F7 Words in s. 431G(5) 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. 127(4) (with Sch. 2 Pts. 1, 2)

Modifications etc. (not altering text)

C1 S. 431G modified by The Insurance Companies (Taxation of Reinsurance Business) Regulations 1995 (S.I. 1995/1730), reg. 12 (as amended (13.8.2007 with effect in accordance with reg. 1(2) of the amending S.I.) by The Insurance Companies (Taxation of Reinsurance Business) (Amendment) Regulations 2007 (S.I. 2007/2087), regs. 1(1), 8)

[F8 431H Company carrying on life assurance business and other insurance business U.K.

(1) This section applies in relation to an insurance company which carries on life assurance business and insurance business of any other kind.

(2) For the purposes of the Corporation Tax Acts—

(a) the life assurance business, and

(b) the other insurance business,

are to be treated as separate businesses.

(3) The profits of the other insurance business shall be charged to tax under [F9 section 35 of CTA 2009 (charge on trade profits)] as the profits of a separate trade.

(4) But subsection (3) above does not apply where that business is mutual business.

(5) As to the profits of the life assurance business, see section 431G.]

Textual Amendments

F8 Ss. 431G, 431H and preceding cross-heading substituted for s. 432 and preceding cross-heading (with effect in accordance with s. 39(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 8 para. 4 (with Sch. 8 Pt. 2)

F9 Words in s. 431H(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. 128 (with Sch. 2 Pts. 1, 2)

Modifications etc. (not altering text)

C2 S. 431H modified by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), reg. 7A (as inserted (14.8.2007 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 2007 (S.I. 2007/2134), regs. 1(1), 7; and as amended by S.I. 2008/1937, regs. 1(1)(2), 5)

432. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F14 432YA [F13 PHI business] other than life assurance business — adjustment consequent on change in Insurance Prudential Sourcebook U.K.

(1) This section applies in the case of—

(a) a company which is a non-profit company, or

(b) the non-profit fund of a company which is not a non-profit company,

if an amount [F15 (“the relevant amount”)] is shown in paragraph 4(12) of Appendix 9.4 to the periodical return for the company for [F16 a] period of account which ends on or after 31st December 2006 [F17 but before 1st January 2009 (a “relevant period of account”)].

[F18 (2) In computing profits of [F19 PHI business] in accordance with the provisions applicable [F20 for the purposes of section 35 of CTA 2009 (charge on trade profits)]—

(a) X shall be added to the closing long term business provision of the company for the relevant period of account; and

(b) XA shall be brought into account as a trading receipt of the company for each subsequent period of account until the total sum of the amounts so bought into account is equal to X (and if that total sum would otherwise exceed X, the excess shall be ignored).

(2A) F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2B) X is—

(a) where the relevant period of account ends before 1st April 2007, the whole of the relevant amount;

(b) where the relevant period of account ends on or after 1st April 2007 but before 1st January 2008, two-thirds of the relevant amount;

(c) where the relevant period of account ends on or after 1st January 2008, one-third of the relevant amount.

(2C) XA is the amount found by applying the following formula—

Here—

• Y is the number of months of the period of account in question (part of a month being counted as a month); and

• Z is—

• (a) where X is the whole of the relevant amount, one-third of X;

• (b) where X is two thirds of the relevant amount, one-half of X;

• (c) where X is one third of the relevant amount, the whole of X.]

(3) F22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) F22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In this section—

• “long term business provision” has the same meaning as in [F23 Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008];

• F24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F25 [F26 (6) This section is subject to sections 82E and 82F of the Finance Act 1989 (treatment of transferors and transferees under insurance business transfer schemes) and those sections shall apply in relation to this section as if—

(a) any reference in them to a provision of section 82D of that Act (treatment of profits: life assurance – adjustment consequent on change in Insurance Prudential Sourcebook) were a reference to the corresponding provision of this section,

[F27 (b) the reference in section 82E(4) to life assurance business were a reference to PHI business, and

(c) the reference in section 82E(7) to the life assurance trade profits provisions were a reference to the provisions applicable for the purposes of section 35 of CTA 2009.]]]]

Textual Amendments

F13 Words in s. 432YA heading substituted (27.12.2008 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) (No. 2) Order 2008 (S.I. 2008/3096), arts. 1(1), 2(4)

F14 S. 432YA inserted (8.1.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment No. 2) Order 2006 (S.I. 2006/3387), arts. 1(1), 2

F15 Words in s. 432YA(1) substituted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 3(2)(a)

F16 Word in s. 432YA(1) substituted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 3(2)(b)

F17 Words in s. 432YA(1) inserted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 3(2)(c)

F18 S. 432YA(2)-(2C) substituted for s. 432YA(2) (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 3(3)

F19 Words in s. 432YA(2) substituted (27.12.2008 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) (No. 2) Order 2008 (S.I. 2008/3096), arts. 1(1), 2(2)

F20 Words in s. 432YA(2) 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. 129(2) (with Sch. 2 Pts. 1, 2)

F21 S. 432YA(2A) omitted (19.2.2008 with effect in accordance with art. 1(2) 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), 5

F22 S. 432YA(3)(4) omitted (17.4.2007 with effect in accordance with art. 1(2) of the repealing S.I.) by virtue of The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 3(4)

F23 S. 432YA(5): words in definition of "long term business provision" substituted (6.4.2008 with effect in accordance with art. 1(2) of the amending S.I.) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008 (S.I. 2008/954), arts. 1(1), 8 (with art. 4)

F24 S. 432YA(5): definitions of "non-profit company" and "non-profit fund" repealed (with effect in accordance with Sch. 10 para. 17(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 10 para. 8(2)(a), Sch. 27 Pt. 2(10), Note

F25 S. 432YA(6) added (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 3(5)

F26 S. 432YA(6) substituted (27.12.2008 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) (No. 2) Order 2008 (S.I. 2008/3096), arts. 1(1), 2(3)

F27 S. 432YA(6)(b)(c) substituted for s. 432YA(6)(b) and preceding word (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. 129(3) (with Sch. 2 Pts. 1, 2)

[F28 432ZA Linked assets. U.K.

(1) In this Chapter “linked assets” means assets of an insurance company which are identified in its records as assets by reference to the value of which benefits provided for under a policy or contract are to be determined [F29 and in a case where only part of an asset is so identified, references to a linked asset are references to that part.]

(2) Linked assets shall be taken—

(a) to be linked to [F30 long-term] business of a particular category if the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category; and

(b) to be linked solely to [F30 long-term] business of a particular category if all (or all but an insignificant proportion) of the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category.

(3) Where an asset is linked to more than one category of [F30 long-term] business, a part of the asset shall be taken to be linked to each category; and references in this Chapter to assets linked (but not solely linked) to any category of business shall be construed accordingly.

(4) Where subsection (3) above applies, the part of the asset linked to any category of business shall be a proportion determined as follows—

(a) where in the records of the company values are shown for the asset in funds referable to particular categories of business, the proportion shall be determined by reference to those values;

(b) in any other case the proportion shall be equal to [F31 the proportion A/B where—

A is the total of the linked liabilities of the company which are liabilities of the internal linked fund in which the asset is held and are referable to that category of business;

B is the total of the linked liabilities of the company which are liabilities of that fund.]

(5) For the purposes of sections 432A to [F32 432E]—

(a) income arising in any period from assets linked but not solely linked to a category of business,

(b) gains arising in any period from the disposal of such assets, and

(c) increases and decreases in the value of such assets,

shall be treated as arising to that category of business in the proportion which is the mean of the proportions determined under subsection (4) above at the beginning and end of the period.

[F33 (6) In this section—

• F34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “linked liabilities” means liabilities in respect of benefits to be determined by reference to the value of linked assets.]

(7) In the case of a policy or contract the effecting of which constitutes a class of life assurance business the fact that it also constitutes [F35 PHI] business shall be disregarded for the purposes of this section unless the benefits to be provided which constitute [F35 PHI] business are to be determined by reference to the value of assets.]

Textual Amendments

F28 S. 432ZA inserted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 11(2) (with Sch. 8 para. 55(2))

F29 Words in s. 432ZA(1) inserted (6.1.2006 with effect in accordance with art. 1 of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2005 (S.I. 2005/3465), art. 4(2)

F30 Words in s. 432ZA(2)(a)(b)(3)(7) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 52(2)(b)

F31 Words in s. 432ZA(4)(b) substituted (with effect in accordance with s. 109(10) of the amending Act) by Finance Act 2000 (c. 17), s. 109(1)

F32 Words in s. 432ZA(5) substituted (with effect in accordance with Sch. 10 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 15(1)

F33 S. 432ZA(6) substituted (with effect in accordance with s. 109(10) of the amending Act) by Finance Act 2000 (c. 17), s. 109(2)

F34 S. 432ZA(6): definition of "internal linked fund" repealed (with effect in accordance with Sch. 10 para. 17(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 10 para. 9(2)(a), Sch. 27 Pt. 2(10), Note

F35 Words in s. 432ZA(7) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 12 (with Sch. 7 Pt. 2)

[F36 432A Apportionment of income and gains. U.K.

[F37 (1) [F38 Subject to section 432B, this] section has effect [F39 for determining for the purposes of any provision of the Corporation Tax Acts in relation to any period for which an insurance company carries on business] what parts of—

(a) income [F40 or losses] arising from the assets of the company’s [F41 long-term insurance fund], or

(b) gains or losses accruing on the disposal of such assets [F42 in accordance with the provisions of the 1992 Act],

are referable to any category of business.

[F43 (1ZA) In subsection (1)(a) above “income” means—

(a) income chargeable under [F44 Chapter 3 of Part 4 of CTA 2009 (profits of a property business) in respect of any separate UK property] businesses treated as carried on by the company under section 432AA,

[F45 (b) income chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of distributions treated by [F46 section 548(5) of CTA 2010] as profits of a UK property business carried on by the company,]

(c) income chargeable under [F47 Chapter 3 of Part 4 of CTA 2009] in respect of any overseas property business treated as carried on by the company under section 432AA,

[F48 (d) income chargeable under Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies) or Chapter 6 of that Part (sale of foreign dividend coupons),

(da) income chargeable under Chapter 7 of Part 10 of CTA 2009 (annual payments not otherwise charged) or Chapter 8 of that Part (income not otherwise charged) which arises from a source outside the United Kingdom,]

(e) distributions received by the company from companies resident in the United Kingdom,

(f) credits in respect of any creditor relationships (within the meaning of [F49 Part 5 of CTA 2009]) of the company,

(g) credits in respect of any derivative contracts (within the meaning of [F50 Part 7 of CTA 2009]) of the company,

(h) any income of the company chargeable under [F51 Chapter 5 of Part 10 of CTA 2009 (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged)],

(i) any credits brought into account by the company under [F52 Chapter 2 of Part 8 of CTA 2009] (intangible fixed assets), and

(j) any income of the company chargeable under [F53 any provision to which [F54 section 1173 of CTA 2010] (miscellaneous charges) applies], other than profits of the company chargeable under section 436A (gross roll-up business).

(1ZB) In subsection (1)(a) above “losses” means—

(a) losses in respect of any separate [F55 UK property businesses] treated as carried on by the company under section 432AA,

(b) losses in respect of any overseas property businesses treated as carried on by the company under that section,

(c) debits in respect of any creditor relationships (within the meaning of [F56 Part 5 of CTA 2009]) of the company,

(d) debits in respect of any derivative contracts (within the meaning of [F57 Part 7 of CTA 2009]) of the company,

(e) any debits brought into account by the company under [F58 Chapter 3 of Part 8 of CTA 2009] (intangible fixed assets), and

(f) any losses of the company computed in the same way as profits chargeable under [F59 any provision to which [F60 section 1173 of CTA 2010] applies], other than any losses of gross roll-up business.

(1ZC) For determining as mentioned in subsection (1) above what parts of income or gains arising from the assets of the company's long-term insurance fund are referable to PHI business (to the extent that it would not be the case by virtue of subsections (1ZA) and (1ZB))—

(a) “income” also includes profits shown in the technical account, and

(b) “losses” also includes losses so shown.]

[F61 (1A) If the company carries on only one category of business in the period—

[F62 (a) all of the income and losses referred to in paragraph (a) of subsection (1) above, and

(b) all of the gains and losses referred to in paragraph (b) of that subsection,

are] referable to that category of business; but if the company carries on more than one category of business in the period, the following provisions shall apply.]

(2) The categories of business referred to in [F63 subsections (1) and (1A)] above are—

[F64 (a) basic life assurance and general annuity business,

(b) gross roll-up business, and

(c) PHI business.]

(3) Income [F65 or losses] arising from, and gains or losses accruing on the disposal of, assets linked to any category of business [F66 is] referable to that category of business.]

[F67 (3A) Amounts falling within—

(a) section 442A,

(b) section 85(2C) of the Finance Act 1989, or

(c) section 85A of that Act,

are directly referable to basic life assurance and general annuity business.]

(4) F68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F69 (4A) Income [F70 or losses] arising from, and gains or losses accruing on the disposal of, foreign [F71 business] assets is referable to gross roll-up business.]

(5) There [F72 is] referable to any category of business F73 . . . the relevant fraction of any [F74 income and losses referred to in paragraph (a) of subsection (1) above, and any gains and losses referred to in paragraph (b) of that subsection,] not directly referable to [F75 any category] of business.

[F76 (6) For the purposes of subsection (5) above “the relevant fraction”, in relation to basic life assurance and general annuity business, is—

where—

A is the aggregate of—

• (a) the mean of the opening and closing liabilities of the basic life assurance and general annuity business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business,

• (b) F77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

• (c) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts;

B is the aggregate of—

• (a) the mean of the opening and closing liabilities of the gross roll-up business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and

• (b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts; and

C is the aggregate of—

• (a) the mean of the opening and closing liabilities of the PHI business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and

• (b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts.

(6A) For the purposes of subsection (5) above “the relevant fraction”, in relation to gross roll-up business, is—

where A, B and C have the same meaning as in subsection (6) above.

(6B) For the purposes of subsection (5) above “the relevant fraction”, in relation to PHI business, is—

where A, B and C have the same meaning as in subsection (6) above.

(6C) But if the denominator found in accordance with subsection (6), (6A) or (6B) above is nil, the relevant fraction for the purposes of subsection (5) above in relation to the category of business in question is such fraction as is just and reasonable.]

[F78 (7) For the purposes of subsections [F79 (5), (6) [F80 , (6A) and (6B)]] above—

(a) income and losses referred to in paragraph (a) of subsection (1) above, and gains and losses referred to in paragraph (b) of that subsection,] are directly referable to a category of business if referable to that category by virtue of subsection (3) or [F81 (4A)] above, F82 . . . [F83 and]

(b) assets are directly referable to a category of business if income [F84 and losses arising from the assets, and gains and losses accruing on the disposal of the assets, are] so referable by virtue of subsection (3) [F85 or (4A)] above,[F86 F87 . . .

(c) F87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]]

[F88 (8) In [F89 subsection (6)] above—

(a) “appropriate part”, in relation to the free assets amount, means—

(i) where none (or none but an insignificant proportion) of the liabilities of the long-term business are with-profits liabilities, the part of that amount which bears to the whole the proportion A/B where—

A is the amount of the liabilities of the category of business in question [F90 (but taking that amount to be nil if it would otherwise be below nil)];

B is the whole amount of the liabilities of the long-term business; and

(ii) in any other case the part of the free assets amount which bears to the whole the proportion C/D where—

C is the amount of the with-profits liabilities of the category of business in question;

D is the whole amount of the with-profits liabilities of the long-term business; F91 . . .

(b) F91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F92 This is subject to subsection (8ZA) below.]

[F93 (8ZA) If for the purposes of subsection (8)(a) above either B or D is nil then, in [F94 paragraph (c) of the definition of A and paragraph (b) of the definitions of B and C in subsection (6)] above, “appropriate part”, in relation to the free assets amount, means the part of that amount which bears to the whole such proportion as is just and reasonable.]

(8A) F95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8B) F95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(9) F96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F97 (9A) F98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9B) F99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

F100 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F36 Ss. 432A-432E inserted by Finance Act 1990 (c. 29), Sch. 6 para. 4

F37 S. 432A(1)-(3) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 13(2)

F38 Words in s. 432A(1) substituted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(2)(a)

F39 Words in s. 432A(1) substituted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 7 para. 8(2)

F40 Words in s. 432A(1)(a) inserted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(2)(b)

F41 Words in s. 432A(1)(a)(9B) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 52(1)(c)

F42 Words in s. 432A(1)(b) inserted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(2)(c)

F43 S. 432A(1ZA)-(1ZC) inserted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(3)

F44 Words in s. 432A(1ZA)(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. 130(2)(a) (with Sch. 2 Pts. 1, 2)

F45 S. 432A(1ZA)(b) 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. 130(2)(b) (with Sch. 2 Pts. 1, 2)

F46 Words in s. 432A(1ZA)(b) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 43(2)(a) (with Sch. 2)

F47 Words in s. 432A(1ZA)(c) 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. 130(2)(c) (with Sch. 2 Pts. 1, 2)

F48 S. 432A(1ZA)(d)(da) substituted for s. 432A(1ZA)(d) (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. 130(2)(d) (with Sch. 2 Pts. 1, 2)

F49 Words in s. 432A(1ZA)(f) 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. 130(2)(e) (with Sch. 2 Pts. 1, 2)

F50 Words in s. 432A(1ZA)(g) 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. 130(2)(f) (with Sch. 2 Pts. 1, 2)

F51 Words in s. 432A(1ZA)(h) 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. 130(2)(g) (with Sch. 2 Pts. 1, 2)

F52 Words in s. 432A(1ZA)(i) 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. 130(2)(h) (with Sch. 2 Pts. 1, 2)

F53 Words in s. 432A(1ZA)(j) 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. 130(2)(i) (with Sch. 2 Pts. 1, 2)

F54 Words in s. 432A(1ZA)(j) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 43(2)(b) (with Sch. 2)

F55 Words in s. 432A(1ZB)(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. 130(3)(a) (with Sch. 2 Pts. 1, 2)

F56 Words in s. 432A(1ZB)(c) 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. 130(3)(b) (with Sch. 2 Pts. 1, 2)

F57 Words in s. 432A(1ZB)(d) 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. 130(3)(c) (with Sch. 2 Pts. 1, 2)

F58 Words in s. 432A(1ZB)(e) 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. 130(3)(d) (with Sch. 2 Pts. 1, 2)

F59 Words in s. 432A(1ZB)(f) 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. 130(3)(e) (with Sch. 2 Pts. 1, 2)

F60 Words in s. 432A(1ZB)(f) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 43(3) (with Sch. 2)

F61 S. 432A(1A) inserted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 7 para. 8(3)

F62 Words in s. 432A(1A) substituted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(4)

F63 Words in s. 432A(2) substituted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 7 para. 8(4)

F64 S. 432A(2)(a)-(c) substituted for s. 432A(2)(a)-(f) (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(3) (with Sch. 7 Pt. 2)

F65 Words in s. 432A(3) inserted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(5)

F66 Word in s. 432A(3) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(4) (with Sch. 7 Pt. 2)

F67 S. 432A(3A) inserted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(6)

F68 S. 432A(4) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(5), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F69 S. 432A(4A) inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(6) (with Sch. 7 Pt. 2)

F70 Words in s. 432A(4A) inserted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(7)

F71 Word in s. 432A(4A) substituted (with effect in accordance with Sch. 17 para. 10(6)(7) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 10(3)(a)

F72 Word in s. 432A(5) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(7)(a) (with Sch. 7 Pt. 2)

F73 Words in s. 432A(5) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(7)(b), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F74 Words in s. 432A(5) substituted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(8)

F75 Words in s. 432A(5)(6)(b)(i) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 13(3) (with Sch. 8 para. 55(2))

F76 S. 432A(6)-(6C) substituted for s. 432A(6)-(6AA) (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(8) (with Sch. 7 Pt. 2)

F77 Words in s. 432A(6) omitted (with effect in accordance with Sch. 17 para. 19(5) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 19(3)(a)

F78 S. 432A(7) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 13(4) (with Sch. 8 para. 55(2))

F79 Words in s. 432A(7) substituted (6.1.2006 with effect in accordance with art. 1 of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2005 (S.I. 2005/3465), art. 5(4)(a)

F80 Words in s. 432A(7) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(9)(a) (with Sch. 7 Pt. 2)

F81 Words in s. 432A(7)(a) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(9)(b) (with Sch. 7 Pt. 2)

F82 Word at the end of s. 432A(7)(a) omitted (6.1.2006 with effect in accordance with art. 1 of the repealing S.I.) by virtue of The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2005 (S.I. 2005/3465), art. 5(4)(b)

F83 Word at the end of s. 432A(7)(a) inserted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(9)(a)

F84 Words in s. 432A(7)(b) substituted (with effect in accordance with Sch. 17 para. 17(12) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 17(9)(b)

F85 Words in s. 432A(7)(b) inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(9)(c) (with Sch. 7 Pt. 2)

F86 S. 432A(7)(c) and preceding word inserted (6.1.2006 with effect in accordance with art. 1 of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2005 (S.I. 2005/3465), art. 5(4)(c)

F87 S. 432A(7)(c) and preceding word omitted (with effect in accordance with Sch. 17 para. 17(12) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 17(9)(c)

F88 S. 432A(8)-(8B) substituted for s. 432A(8) (6.1.2006 with effect in accordance with art. 1 of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2005 (S.I. 2005/3465), art. 5(5)

F89 Words in s. 432A(8) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(10) (with Sch. 7 Pt. 2)

F90 Words in s. 432A(8)(a)(i) inserted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 4(5)(a)

F91 S. 432A(8)(b) and preceding word omitted (with effect in accordance with Sch. 17 para. 19(5) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 19(3)(b)

F92 Words in s. 432A(8) inserted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 4(5)(b)

F93 S. 432A(8ZA) inserted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 4(6)

F94 Words in s. 432A(8ZA) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(11) (with Sch. 7 Pt. 2)

F95 S. 432A(8A)(8B) omitted (with effect in accordance with Sch. 17 para. 19(5) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 19(3)(c)

F96 S. 432A(9) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 13(12), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F97 S. 432A(9A)(9B) inserted (with effect in accordance with s. 109(10) of the amending Act) by Finance Act 2000 (c. 17), s. 109(6)

F98 S. 432A(9A) repealed (with effect in accordance with Sch. 10 para. 17(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 10 para. 9(2)(b), Sch. 27 Pt. 2(10), Note

F99 S. 432A(9B) repealed (with effect in accordance with Sch. 43 Pt. 3(12), Note 1 of the repealing Act) by Finance Act 2003 (c. 14), Sch. 43 Pt. 3(12)

F100 S. 432A(10) repealed (27.7.1993 with effect in relation to accounting periods beginning on or after 1.1.1993) by 1993 c. 34, ss. 91(2)(a), 213, Sch. 23 Pt.III (8), Note

Modifications etc. (not altering text)

C5 S. 432A modified (3.5.1994) by Finance Act 1994, (c. 9), s. 169, Sch. 18 para 1(4)

C6 S. 432A modified by S.I. 1992/1655, regs. 6-8 (as amended (31.12.1993) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 1993 (S.I. 1993/3111), regs. 1, 5, 7; and as further amended (10.8.1995) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 1995 (S.I. 1995/1916), regs. 1, 5)

C7 S. 432A applied (with effect in accordance with s. 105(1) of the affecting Act) by Finance Act 1996 (c. 8), Sch. 11 para. 3 (with Sch. 15)

C8 S. 432A applied (19.3.1997) by Finance Act 1997 (c. 16), Sch. 12 para 19

C9 S. 432A modified (20.3.1997 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), 9, 13 (as amended by: S.I. 2000/2710, regs. 1, 4; S.I. 2001/3629, arts. 1, 157, 165; S.I. 2001/3975, regs. 1, 4; S.I. 2003/23, regs. 1, 5, 6; S.I. 2004/822, regs. 1, 8, 9; S.I. 2005/2005, regs. 1, 6)

C10 S. 432A modified by Finance Act 1996 (c. 8), Sch. 11 para. 3A(5) (as inserted (with effect in accordance with s. 109(10) of the 2000 amending Act) by Finance Act 2000 (c. 17), s. 109(8))

C11 S. 432A applied (with effect in accordance with Sch. 29 Pt. 14 of the affecting Act) by Finance Act 2002 (c. 23), Sch. 29 para. 138(2)(3)

C12 S. 432A modified (12.8.2005 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 9 (as amended by: S.I. 2007/2134, regs. 1(1)(2), 9; S.I. 2008/1937, regs. 1(1)(2), 6)

C13 S. 432A excluded by Finance Act 1989 (c. 26), s. 83XA(14) (as inserted (with effect in accordance with Sch. 10 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 10 para. 2(1))

C14 S. 432A(2) 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), 10-12

C15 S. 432A(2) modified (6.4.1999) by The Individual Savings Account (Insurance Companies) Regulations 1998 (S.I. 1998/1871), regs. 1, 5, 10

C16 S. 432A(2) modified (6.4.2005) by The Child Trust Funds (Insurance Companies) Regulations 2004 (S.I. 2004/2680), regs. 1, 4, 8; S.I. 2004/3369, art. 2(1)

[F102 432AA [F101 UK property business or overseas property business] U.K.

(1) An insurance company [F103 is treated (despite sections 205 and 206 of CTA 2009) as carrying on separate UK property businesses or overseas property businesses], in accordance with the following rules.

(2) The exploitation of land held as an asset of the company’s [F104 long-term insurance fund] is treated as a separate business from the exploitation of land not so held.

(3) F105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The exploitation of land held as an asset linked to any of the following categories of business is regarded as a separate business—

[F106 (a) basic life assurance and general annuity business;

(b) gross roll-up business; and

(c) PHI business.]

(5) Accordingly, the exploitation of land held as an asset of the company’s [F104 long-term insurance fund] otherwise than as mentioned in subsection F107 . . . (4) is treated as a separate business from any other.

(6) In this section “land” means any estate, interest or rights in or over land.]

Textual Amendments

F101 S. 432AA title 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. 131(3) (with Sch. 2 Pts. 1, 2)

F102 Ss. 432AA, 432AB inserted (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), Sch. 5 para 39 (with Sch. 5 para. 73)

F103 Words in s. 432AA(1) 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. 131(2) (with Sch. 2 Pts. 1, 2)

F104 Words in s. 432AA(2)(3)(5) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 52(1)(d)

F105 S. 432AA(3) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 14(2), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F106 S. 432AA(4)(a)-(c) substituted for s. 432AA(4)(a)-(d) (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 14(3) (with Sch. 7 Pt. 2)

F107 Words in s. 432AA(5) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 14(4), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

Modifications etc. (not altering text)

C17 S. 432AA modified by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), reg. 13A (as inserted (13.10.1999) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 1999 (S.I. 1999/2636), regs. 1, 3)

C18 S. 432AA modified (12.8.2005 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 10 (as amended by: S.I. 2007/2134, regs. 1(1)(2), 11; S.I. 2008/1937, regs. 1(1)(2), 8)

C19 S. 432AA(4) modified (6.4.1999) by The Individual Savings Account (Insurance Companies) Regulations 1998 (S.I. 1998/1871), regs. 1, 5, 11

C20 S. 432AA(4) modified (6.4.2005) by The Child Trust Funds (Insurance Companies) Regulations 2004 (S.I. 2004/2680), regs. 1, 4, 9; S.I. 2004/3369, art. 2(1)

[F102 432AB Losses from [F108 UK property business] or overseas property business. U.K.

(1) This section applies to any loss arising in a [F109 UK property business] or overseas property business.

(2) F110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F111 (3) So far as a loss is referable to basic life assurance and general annuity business, it shall be treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section.]

(4) Where a company is treated under section 432AA as carrying on—

(a) more than one [F112 UK property business], or

(b) more than one overseas property business,

then, in relation to either kind of business, the reference in subsection (3) above to a loss referable to basic life assurance and general annuity business shall be construed as a reference to any aggregate net loss after setting the losses from those businesses which are so referable against any profits from those businesses that are so referable.

(5) The provisions of [F113 Chapter 4 of Part 4 of CTA 2010 (loss relief: property losses)] do not apply to a loss referable to life assurance business or any category of life assurance business.

(6) F114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F102 Ss. 432AA, 432AB inserted (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), Sch. 5 para 39 (with Sch. 5 para. 73)

F108 Words in s. 432AB title 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. 132(4) (with Sch. 2 Pts. 1, 2)

F109 Words in s. 432AB(1) 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. 132(2) (with Sch. 2 Pts. 1, 2)

F110 S. 432AB(2) omitted (with effect in accordance with Sch. 17 para. 17(12) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 17(11)(a)

F111 S. 432AB(3) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), Sch. para. 17(2)

F112 Words in s. 432AB(4)(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. 132(3) (with Sch. 2 Pts. 1, 2)

F113 Words in s. 432AB(5) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 44 (with Sch. 2)

F114 S. 432AB(6) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 15, Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

Modifications etc. (not altering text)

C21 S. 432AB modified by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), reg. 13B (as inserted (13.10.1999) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 1999 (S.I. 1999/2636), regs. 1, 3)

C22 S. 432AB modified (12.8.2005 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 11

[F115 432B Apportionment of receipts brought into account. U.K.

(1) This section and [F116 sections 432C to [F117 432G]] have effect where it is necessary in accordance with section 83 of the Finance Act 1989 to determine what parts of any items [F118 brought into account, within the meaning of that section,] are referable to life assurance business or [F119 gross roll-up business].

[F120 (2) Where for that purpose reference falls to be made to more than one account recognised for the purposes of that section, the provisions of sections 432C to [F121 432G] apply separately in relation to each account.]

(3) [F122 Section 432C applies] where the business with which an account is concerned (“the relevant business”) relates exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus; and [F123 sections 432E and 432F apply] where the relevant business relates wholly or partly to other policies or contracts [F124 (and section 432G applies in either case)]. ]

[F125 (4) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F127 (8) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8A) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8B) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8C) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8D) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8E) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8F) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8G) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(9) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F128 (12) F126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F115 Ss. 432A-432E inserted by Finance Act 1990 (c. 29), Sch. 6 para. 4

F116 Words in s. 432B(1)(2) substituted (with effect in accordance with Sch. 8 para. 53(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 17(1)(a) (with Sch. 8 para. 55(2))

F117 Words in s. 432B(1) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 16(2)(a) (with Sch. 7 Pt. 2)

F118 Words in s. 432B(1) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 16(2)(a) (with Sch. 8 para. 55(2))

F119 Words in s. 432B(1) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 16(2)(b) (with Sch. 7 Pt. 2)

F120 S. 432B(2) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 16(2)(b) (with Sch. 8 para. 55(2))

F121 Words in s. 432B(2) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 16(3) (with Sch. 7 Pt. 2)

F122 Words in s. 432B(3) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 16(4)(a) (with Sch. 7 Pt. 2)

F123 Words in s. 432B(3) substituted (with effect in accordance with Sch. 8 para. 53(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 17(1)(b) (with Sch. 8 para. 55(2))

F124 Words in s. 432B(3) inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 16(4)(b) (with Sch. 7 Pt. 2)

F125 S. 432B(4)-(11) inserted (6.1.2006 with effect in accordance with art. 1 of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2005 (S.I. 2005/3465), art. 6(2)

F126 S. 432B(4)-(12) omitted (with effect in accordance with Sch. 17 para. 19(5) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 19(4)

F127 S. 432B(8)-(8G) substituted for s. 432B(8) (9.6.2006 with effect in accordance with art. 1(2)(3) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2006 (S.I. 2006/1358), arts. 1(1), 3(2)

F128 S. 432B(12) inserted (9.6.2006 with effect in accordance with art. 1(2)(3) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2006 (S.I. 2006/1358), arts. 1(1), 3(5)

Modifications etc. (not altering text)

C23 S. 432B modified by S.I. 1992/1655, reg. 9 (as amended (31.12.1993) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 1993 (S.I. 1993/3111), regs. 1, 8)

C24 Ss. 432B-432E excluded (31.7.1992 with effect as mentioned in reg. 1 of the amending S.I.) by S. I. 1992/1655, regs. 1, 10

C25 S. 432B modified (31.7.1992 with effect as mentioned in reg. 1 of the amending S.I.) by S.I. 1992/1655, regs. 1, 9(1)

C26 S. 432B modified by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), reg. 9A (as inserted (14.8.2007 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 2007 (S.I. 2007/2134), regs. 1(1), 10 (and that modifying reg. 10 is omitted (12.8.2008 with effect in accordance with reg. 1(2) of the revoking S.I.) by virtue of S.I. 2008/1937, regs. 1(1), 7))

C27 Ss. 432B-432G applied (1.4.2010 with effect in accordance with s. 381(1) of the affecting Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 102(3) (with Sch. 9)

[F129 432C Section 432B apportionment: non-participating funds U.K.

(1) This section specifies the extent to which the net amount is referable to life assurance business or to gross roll-up business.

(2) In this section “the net amount” means the aggregate of the amounts brought into account—

(a) as investment income,

(b) as an increase in the value of assets, or

(c) as other income,

less the aggregate of the amounts brought into account as a decrease in the value of assets.

(3) To the extent that the net amount is attributable to—

(a) assets linked to life assurance business, or

(b) foreign [F130 business] assets,

it is referable to life assurance business.

(4) There is also referable to life assurance business the appropriate fraction of so much of the net amount as is not attributable to linked assets or foreign [F130 business] assets.

(5) For the purposes of subsection (4) above “the appropriate fraction” is—

where—

A is the mean of the opening and closing liabilities of the relevant business so far as referable to life assurance business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the aggregate of the mean of the opening and closing net values of assets linked to the relevant business so far as so referable and foreign [F130 business] assets; and

B is the mean of the opening and closing liabilities of the relevant business so far as referable to PHI business, reduced (but not below nil) by the mean of the opening and closing net values of any assets linked to PHI business.

(6) But if the denominator found in accordance with subsection (5) above is nil, the appropriate fraction for the purposes of subsection (4) above is such fraction as is just and reasonable.

(7) To the extent that the net amount is attributable to—

(a) assets linked to gross roll-up business, or

(b) foreign [F130 business] assets,

it is referable to gross roll-up business.

(8) There is also referable to gross roll-up business the relevant fraction of so much of the net amount as is not attributable to linked assets or foreign [F130 business] assets.

(9) For the purposes of subsection (8) above “the relevant fraction” is—

where—

C is the mean of the opening and closing liabilities of the relevant business so far as referable to gross roll-up business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the aggregate of the mean of the opening and closing net values of any assets linked to gross roll-up business and foreign [F130 business] assets; and

D is the mean of the opening and closing liabilities of the relevant business so far as referable to basic life assurance and general annuity business or PHI business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets linked to either of those categories of business.

(10) But if the denominator found in accordance with subsection (9) above is nil, the relevant fraction for the purposes of subsection (8) above is such fraction as is just and reasonable.

(11) For the purposes of this section, so much of the net amount—

(a) as is brought into account as other income in an internal linked fund of the company, and

(b) as is not attributable to assets of that fund,

is to be treated as linked to a category of business to the same extent as income attributable to an asset of the fund would, by virtue of section 432ZA, be referable to that category of business.]

Textual Amendments

F129 S. 432C substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 17 (with Sch. 7 Pt. 2)

F130 Words in s. 432C(3)-(5)(7)-(9) substituted (with effect in accordance with Sch. 17 para. 10(6)(7) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 10(3)(b)

Modifications etc. (not altering text)

C28 Ss. 432B-432G applied (1.4.2010 with effect in accordance with s. 381(1) of the affecting Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 102(3) (with Sch. 9)

[F131 432CA Apportionment of asset value increase where line 51 amount decreases U.K.

(1) This section applies where—

(a) an insurance company is not a non-profit company in relation to a period of account (“the current period of account”),

(b) in the case of any business with which an account of the company for the current period of account is concerned (“the relevant business”), an amount is a relevant brought into account amount for that period of account (see subsection (2)),

(c) section 432C applies for determining the extent to which the relevant brought into account amount is referable to life assurance business or to gross roll-up business, and

(d) the line 51 reduction condition is met (see subsection (3)).

(2) An amount is a relevant brought into account amount for a period of account if—

(a) it is brought into account as mentioned in subsection (2)(b) of section 83 of the Finance Act 1989 (increases in value of non-linked assets) for that period,

(b) it is deemed to be brought into account for that period by subsection (2B) of that section in consequence of the transfer of non-linked assets, or

(c) it is taken into account under subsection (2) of that section for that period by virtue of section 444AB as being the relevant amount in relation to non-linked assets.

(3) The line 51 reduction condition is met if—

(a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for the current period of account, is less than

(b) the amount so shown for the period of account immediately before it;

and the amount of the difference is “the relevant reduction”.

(4) Section 432C applies in relation to so much of the relevant brought into account amount as does not exceed the relevant reduction (“the affected amount”) as if it were brought into account as an increase in the value of assets in the case of the relevant business for the applicable appropriate period of account of the company.

(5) A period of account is an “appropriate period of account” if it ended before the current period of account and—

(a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for it, was more than

(b) the amount so shown for the period of account immediately before it;

and the amount of the difference is “the relevant increase.”

(6) The “applicable” appropriate period of account is the one which ended most recently (“the most recent appropriate period of account”).

(7) But if the relevant increase in the case of the most recent appropriate period of account is less than the affected amount, the most recent appropriate period of account is the applicable appropriate period of account in relation to only so much of the affected amount as does not exceed that relevant increase.

(8) In that case, the appropriate period of account which ended most recently before the most recent appropriate period of account is the applicable appropriate period of account in relation to so much of the remainder as does not exceed the relevant increase in the case of that appropriate period of account (and, where necessary, so on until the applicable appropriate period of account is established in relation to all of the affected amount or there are no more appropriate periods of account).

(9) If the current period of account is not the first in relation to which this section has applied in the case of the business concerned, the amount of the relevant increase in the case of any appropriate period of account (“the period in question”) is to be treated as reduced by the relevant aggregate.

(10) The “relevant aggregate” is the aggregate of so much of the affected amount for any period or periods of account earlier than the current period of account as was an amount to which section 432C applied as if it were brought into account as mentioned in subsection (4) for the period in question.

(11) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.]

Textual Amendments

F131 S. 432CA inserted (with effect in accordance with s. 47(2)-(4) of the amending Act) by Finance Act 2010 (c. 13), s. 47(1)

Valid from 27/07/2010

[F132 432CB Transfers of business involving excess assets U.K.

(1) This section applies where, under an insurance business transfer scheme, there is a transfer of long-term business—

(a) from a non-profit fund of an insurance company (“the transferor”) which is not a non-profit company in relation to the relevant period of account,

(b) to another insurance company (“the transferee”) to constitute or form part of a non-profit fund of the transferee (“the transferee's non-profit fund”),

(“the transfer”) and conditions A and B are met.

(2) Condition A is that the fair value of the assets transferred by the transfer exceeds by an amount (“the chargeable excess”) the amount of the relevant liabilities transferred by the transfer.

For this purpose “relevant” liabilities are liabilities of a type shown (or treated as shown) in any of lines 14, 17, 21 to 23 and 31 to 38 of Form 14 of a periodical return of an insurance company.

(3) Condition B is that the main purpose, or one of the main purposes, of the transferor or the transferee (or both) in entering into any part of the transfer scheme arrangements is to secure a reduction in tax as a result of section 432C having effect in the case of the transferee, rather than the transferor, in relation to the business transferred by the transfer.

(4) The chargeable excess is to be brought into account by the transferor as mentioned in section 83(2)(b) of the Finance Act 1989 for the relevant period of account.

(5) Where there is no amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first period of account of the transferee ending on or after the transfer date (“the first post-transfer period of account”), the chargeable excess is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the first post-transfer period of account.

(6) Where—

(a) there is an amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first post-transfer period of account, and

(b) the amount so shown in column 1 of line 51 of Form 14 of the periodical return of the transferee for that period of account, or for any other period of account of the transferee ending after the transfer date, (an “affected period of account”) is less than the total chargeable excess amount,

the relevant amount is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the affected period of account.

(7) For this purpose “the relevant amount” is the amount by which—

(a) the amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the affected period of account, is less than

(b) the total chargeable excess amount less any amount brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for any earlier period of account by virtue of the operation of this section in relation to the transferee's non-profit fund.

(8) In subsections (6) and (7) “the total chargeable excess amount” means the aggregate of—

(a) the chargeable excess, and

(b) any amount which is the chargeable excess in relation to any other transfer of business to the transferee's non-profit fund.

(9) In this section “the relevant period of account” means—

(a) the period of account of the transferor ending immediately before the transfer date, or

(b) if no period of account of the transferor so ends, the period of account of the transferor covering the transfer date.

(10) In this section “the transfer scheme arrangements” means the insurance business transfer scheme and any relevant associated operations; and for this purpose “relevant associated operations” means—

(a) any other insurance business transfer scheme,

(b) any contract of reinsurance, or

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

which is effected in connection with the insurance business transfer scheme.

(11) In subsection (10)—

• “dependant”, and

• “insurance undertaking”,

have the same meaning as in the Insurance Prudential Sourcebook.

(12) In this section “the transfer date” means the date on which the insurance business transfer scheme takes effect.

(13) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.]

Textual Amendments

F132 S. 432CB inserted (with effect in accordance with s. 9(2) of the amending Act) by Finance (No. 2) Act 2010 (c. 31), s. 9(1)

[F133 432D Section 432B apportionment: value of non-participating funds. U.K.

F134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F133 Ss. 432A-432E inserted by Finance Act 1990 (c. 29), Sch. 6 para. 4

F134 S. 432D repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 18, Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

[F135 432E Section 432B apportionment: participating funds. U.K.

[F136 (1) The part of the net amount which is referable to life assurance business or to gross roll-up business is—

(a) the amount determined in accordance with subsections (2) and (2A) below, or

(b) if greater, the amount determined in accordance with subsection (3) below.

(1A) In this section “the net amount” means the aggregate of the amounts brought into account—

(a) as investment income,

(b) as an increase in the value of assets, or

(c) as other income,

less the aggregate of the amounts brought into account as a decrease in the value of assets.]

(2) For the purposes of subsection (1) above there shall be determined the amount which is such as to secure—

(a) F137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) F138 . . . that

where—

• S is the surplus of the relevant business;

• AS is so much of that surplus as is allocated to persons entitled to the benefits provided for by the policies or contracts to which the relevant business relates;

• CAS is so much of the surplus so allocated as is attributable to policies or contracts of life assurance business or of gross roll-up business]; and

• CS is so much of the surplus of the relevant business as would remain if the relevant business were confined to [F139 life assurance business or to gross roll-up business].

(2A) In a case where [F140 an amount or amounts are] taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of subsection (2B) of that section [F141 or by virtue of section F142 . . . [F143 [F144 444AB, F145 . . . ][F146 444AEA,][F147 444AECA,] 444AF(2) or 444AK(2)] of this Act], the amount determined under subsection (2) above is increased by—

where—

CAS and AS have the same meanings as in subsection (2) above; and

[F148 RP is the amount or the aggregate of the amounts taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of any of the following provisions—

(a)

subsection (2B) of that section;

(aa)

[F149 section 444AB F150 . . . of this Act;]

(ab)

[F151 section 444AEA [F152 or 444AECA] of this Act;]

(b)

F142 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

[F153 subsection (2) of section 444AF of this Act (and see subsections (5) and (6) of that section);

(d)

subsection (2) of section 444AK of this Act (but only for the purposes mentioned in subsection (3) of that section).]

(3) For the purposes of subsection (1) above there shall also be determined the aggregate of—

(a) the applicable percentage of what is left of the mean of the opening and closing liabilities of the relevant business so far as referable to the category of business concerned [F154 (but taking that mean to be nil if it would otherwise be below nil)] after deducting from it the mean of the opening and closing values of any assets of the relevant business [F155 linked] to that category of business [F156 F157 . . . ], and

(b) the part of the net amount F158 . . . that is attributable to assets [F155 linked] to that category of business [F159 F160 . . . ].

(4) [F161 Subject to subsection (4A) below, for] the purposes of subsection (3) above “the applicable percentage”, in any case, [F162 is—

where—

A is so much of the net amount as is brought into account in respect of the relevant business less such part of it as is attributable to linked assets F163 . . . ; and

B is the mean of the opening and closing liabilities of the relevant business reduced by the mean of the opening and closing values of any assets of the relevant business which are linked assets F164 . . . .]

[F165 (4A) If the mean of the opening and closing liabilities of the relevant business reduced by the opening and closing values of any assets of the relevant business which are linked assets [F166 F167 . . . ] is nil then, for the purposes of subsection (3) above, “the applicable percentage” is such percentage as is just and reasonable.]

(5) F168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F135 Ss. 432A-432E inserted by Finance Act 1990 (c. 29), Sch. 6 para. 4

F136 S. 432E(1)(1A) substituted for s. 432E(1) (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(2) (with Sch. 7 Pt. 2)

F137 S. 432E(2)(a) repealed (with effect in accordance with Sch. 33 para. 10(5) of the repealing Act) by Finance Act 2003 (c. 14), Sch. 33 para. 10(3)(a), Sch. 43 Pt. 3(12), Note 2

F138 Words in s. 432E(2)(b) repealed (with effect in accordance with Sch. 33 para. 10(5) of the repealing Act) by Finance Act 2003 (c. 14), Sch. 33 para. 10(3)(b), Sch. 43 Pt. 3(12), Note 2

F139 Words in s. 432E(2) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(3)(b) (with Sch. 7 Pt. 2)

F140 Words in s. 432E(2A) substituted (with effect in accordance with Sch. 9 para. 5(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 9 para. 5(2)(a)

F141 Words in s. 432E(2A) inerted (with effect in accordance with Sch. 9 para. 5(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 9 para. 5(2)(b)

F142 Words in s. 432E(2A) repealed (with effect in accordance with Sch. 10 para. 17(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 10 para. 2(3), Sch. 27 Pt. 2(10), Note

F143 Words in s. 432E(2A) inserted (with effect in accordance with Sch. 11 para. 2(4) of the amending Act) by Finance Act 2006 (c. 25), Sch. 11 para. 2(2)

F144 Words in s. 432E(2A) inserted (with effect in accordance with Sch. 9 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 9 para. 4(2)(a); S.I. 2008/379, art. 2

F145 Words in s. 432E(2A) 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), 6(a)

F146 Words in s. 432E(2A) inserted (with effect in accordance with Sch. 9 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 9 para. 8(2); S.I. 2008/379, art. 2

F147 Words in s. 432E(2A) inserted (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), 6(b)

F148 Words in s. 432E(2A) substituted (with effect in accordance with Sch. 9 para. 5(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 9 para. 5(3)

F149 Words in s. 432E(2A) inserted (with effect in accordance with Sch. 9 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 9 para. 4(2)(b); S.I. 2008/379, art. 2

F150 Words in s. 432E(2A) 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), 6(c)

F151 Words in s. 432E(2A) inserted (with effect in accordance with Sch. 9 para. 17(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 9 para. 8(2); S.I. 2008/379, art. 2

F152 Words in s. 432E(2A) inserted (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), 6(d)

F153 Words in s. 432E(2A) inserted (with effect in accordance with Sch. 11 para. 2(4) of the amending Act) by Finance Act 2006 (c. 25), Sch. 11 para. 2(3)

F154 Words in s. 432E(3)(a) inserted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 7(2)

F155 Words in s. 432E(3)(a)(b)(6)(a) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 12(1)(a) (with Sch. 8 para. 55(2))

F156 Words in s. 432E(3)(a) inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(4)(a) (with Sch. 7 Pt. 2)

F157 Words in s. 432E(3)(a) omitted (with effect in accordance with Sch. 23 para. 7 of the repealing Act) by virtue of Finance Act 2009 (c. 10), Sch. 23 para. 5(2)

F158 Words in s. 432E(3)(b) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(4)(b)(i), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F159 Words in s. 432E(3)(b) inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(4)(b)(ii) (with Sch. 7 Pt. 2)

F160 Words in s. 432E(3)(b) omitted (with effect in accordance with Sch. 17 para. 10(6)(7) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 10(4)(a)

F161 Words in s. 432E(4) substituted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 7(3)

F162 Words in s. 432E(4) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(5) (with Sch. 7 Pt. 2)

F163 Words in s. 432E(4) omitted (with effect in accordance with Sch. 23 para. 7 of the repealing Act) by virtue of Finance Act 2009 (c. 10), Sch. 23 para. 5(3)

F164 Words in s. 432E(4) omitted (with effect in accordance with Sch. 17 para. 10(6)(7) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 10(4)(b)

F165 S. 432E(4A) inserted (17.4.2007 with effect in accordance with art. 1(2) of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007 (S.I. 2007/1031), arts. 1(1), 7(4)

F166 Words in s. 432E(4A) inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(6) (with Sch. 7 Pt. 2)

F167 Words in s. 432E(4A) omitted (with effect in accordance with Sch. 23 para. 7 of the repealing Act) by virtue of Finance Act 2009 (c. 10), Sch. 23 para. 5(4)

F168 S. 432E(5)(6) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 19(7), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

Modifications etc. (not altering text)

C29 Ss. 432B-432E excluded (31.7.1992 with effect as mentioned in reg. 1 of the amending S.I.) by S.I. 1992/1655, regs. 1,10

C30 S. 432E modified (20.3.1997 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), regs. 1(1), 14 (as amended by S.I. 2004/822, regs. 1, 10)

C31 S. 432E modified (12.8.2005 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 12 (as amended by S.I. 2007/2134, regs. 1(1)(2), 12)

C32 Ss. 432B-432G applied (1.4.2010 with effect in accordance with s. 381(1) of the affecting Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 102(3) (with Sch. 9)

C33 S. 432E modified by Corporation Tax Act 2009 (c. 4), s. 18Q(2) (as inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 13 paras. 4, 31)

C34 For orders see Part III Vol.5 (under

“Life assurance apportionment of participating funds: applicable percentage”).

[F169 432F Section 432B apportionment: supplementary provisions. U.K.

(1) The provisions of this section provide for the reduction of the amount determined in accordance with section 432E(3) (“the subsection (3) figure”) for an accounting period in which that amount exceeds, or would otherwise exceed, the amount determined in accordance with section 432E(2) (“the subsection (2) figure”).

(2) F170 . . . There shall be determined for each accounting period the amount (if any) by which the subsection (2) figure F171 . . . exceeds the subsection (3) figure (“the subsection (2) excess”).

(3) Where there is a subsection (2) excess, the amount shall be carried forward and if in any subsequent accounting period the subsection (3) figure exceeds, or would otherwise exceed, the subsection (2) figure, it shall be reduced by the amount or cumulative amount of subsection (2) excesses so far as not previously used under this subsection.

(4) Where in an accounting period that amount is greater than is required to bring the subsection (3) figure down to the subsection (2) figure, the balance shall be carried forward and aggregated with any subsequent subsection (2) excess for use in subsequent accounting periods.]

Textual Amendments

F169 S. 432F inserted (with effect in accordance with Sch. 8 para. 53 of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 17(3) (with Sch. 8 para. 55(2))

F170 Words in s. 432F(2) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 20(a), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F171 Words in s. 432F(2) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 20(b), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

Modifications etc. (not altering text)

C35 Ss. 432B-432G applied (1.4.2010 with effect in accordance with s. 381(1) of the affecting Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 102(3) (with Sch. 9)

C36 S. 432F(1) modified (20.3.1997 with effect in accordance with reg. 1(2) of the amending S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), regs. 1(1), 15; and that modifying reg. 15 is omitted (8.4.2004 with effect in accordance with reg. 1 of the revoking S.I.) by virtue of S.I. 2004/822, reg. 11

[F172 [F173 432G Section 432B apportionment: business transfers-in U.K.

(1) There is referable to the life assurance business of the transferee the appropriate fraction of the amount brought into account as a business transfer-in and of any amount taken into account as profits under section 444ABD(1).

(2) For the purposes of subsection (1) above “the appropriate fraction” is—

where—

LABL is the amount of the liabilities transferred that are referable to the life assurance business (but is nil if it would otherwise be below nil); and

TL is the whole of the liabilities transferred.

(3) But if the amount of the liabilities transferred is nil, the appropriate fraction for the purposes of subsection (1) above is such fraction as is just and reasonable.

(4) There is referable to the gross roll-up business of the transferee the relevant fraction of the amount brought into account as a business transfer-in and of any amount taken into account as profits under section 444ABD(1).

(5) For the purposes of subsection (4) above “the relevant fraction” is—

where—

GRBL is the amount of the liabilities transferred that are referable to the gross roll-up business (but is nil if it would otherwise be below nil); and

TL has the same meaning as in subsection (2) above.

(6) But if the amount of the liabilities transferred is nil, the relevant fraction for the purposes of subsection (4) above is such fraction as is just and reasonable.]]

Textual Amendments

F172 S. 432G inserted (1.1.2005 with effect in accordance with art. 1 of the amending S.I.) by The Insurance Companies (Corporation Tax Acts) Order 2004 (S.I. 2004/3266), art. 4

F173 S. 432G substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 21 (with Sch. 7 Pt. 2)

Modifications etc. (not altering text)

C37 Ss. 432B-432G applied (1.4.2010 with effect in accordance with s. 381(1) of the affecting Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 102(3) (with Sch. 9)

F174 433 Profits reserved for policy holders and annuitants. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F174 S. 433 repealed (14.3.1989) by Finance Act 1989 (c. 26), s. 84(5), Sch. 8 para. 2, Sch. 17 Pt. IV, Note 3 (with s. 84(6))