Income and Corporation Taxes Act 1988

5 (1) Any designation of assets required for the purposes of paragraph 3 above shall be made by a company in accordance with the following provisions of this paragraph.

(2) When designating assets for the purposes of paragraph 3(1) above, a company shall not designate an asset falling within any paragraph of sub-paragraph (5) below unless it designates all assets falling within each of the preceding paragraphs of that sub-paragraph.

(3) When designating assets for the purposes of paragraph 3(3) above, a company shall not designate an asset falling within any paragraph of sub-paragraph (5) below unless it designates all assets falling within each of the succeeding paragraphs of that sub-paragraph.

(4) When an asset falls within more than one paragraph of sub-paragraph (5) below, it shall be taken for the purposes of this paragraph to fall only within the first of them.

(5) The categories of assets referred to in sub-paragraphs (2) and (3) above are—

(a) assets [F1 , other than land in the United Kingdom,] linked solely to overseas life assurance business;

(b) so many of any assets denominated in an overseas currency, other than any non-overseas linked assets, as have a value at the end of the period not exceeding the amount of the company’s liabilities in respect of benefits expressed in that currency so far as referable to overseas life assurance business;

(c) assets [F2 , other than land in the United Kingdom,] the management of which is under the control of a person whose normal place of work is at a branch or agency [F3 outside the United Kingdom] at or through which the company carries on overseas life assurance business;

(d) securities issued by the Treasury with a FOTRA condition and securities to which section 581 of this Act applies;

[F4 (e) assets not within any of paragraphs (ea), (f) and (g) below;

(ea) interests in authorised unit trusts;]

(f) shares in companies resident in the United Kingdom;

[F5 (g) land in the United Kingdom;]

but assets linked solely to [F6 pension business, life reinsurance business or basic life assurance and general annuity business] are not within any paragraph of this sub-paragraph (and may not be designated for the purposes of paragraph 3 above).

(6) For the purposes of sub-paragraph (5)(b) above assets are “non-overseas linked assets” if they are linked assets and none of the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of overseas life assurance business.

(7) For the purposes of sub-paragraph (5)(d) above securities are issued with a FOTRA condition if—

(a) they are issued with the condition that the interest on the securities shall not be liable to income tax so long as it is shown, in a manner directed by the Treasury, that the securities are in the beneficial ownership of persons who are not ordinarily resident in the United Kingdom, or

(b) they are issued with the condition mentioned in section 22(1) of the M1 Finance (No.2) Act 1931 whether or not modified by virtue of section 60(1) of the M2 Finance Act 1940.

Textual Amendments

F1 Words in Sch. 19AA para. 5(5)(a) inserted (10.1.1995 with effect in accordance with art. 1 of the amending S.I.) by The Overseas Life Assurance Fund (Amendment) Order 1994 (S.I. 1994/3278), art. 5(a)

F2 Words in Sch. 19AA para. 5(5)(c) inserted (10.1.1995 with effect in accordance with art. 1 of the amending S.I.) by The Overseas Life Assurance Fund (Amendment) Order 1994 (S.I. 1994/3278), art. 5(b)(i)

F3 Words in Sch. 19AA para. 5(5)(c) inserted (10.1.1995 with effect in accordance with art. 1 of the amending S.I.) by The Overseas Life Assurance Fund (Amendment) Order 1994 (S.I. 1994/3278), art. 5(b)(ii)

F4 Sch. 19AA para. 5(5)(e)(ea) substituted for para. 5(5)(e) (10.1.1995 with effect in accordance with art. 1 of the amending S.I.) by The Overseas Life Assurance Fund (Amendment) Order 1994 (S.I. 1994/3278), art. 5(c)

F5 Sch. 19AA para. 5(5)(g) inserted 10.1.1995 with effect in accordance with art. 1 of the amending S.I.) by The Overseas Life Assurance Fund (Amendment) Order 1994 (S.I. 1994/3278), art. 5(d)

F6 Words in Sch. 19AA para. 5(5) substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 8

Marginal Citations

M1 1931 c. 49.

M2 1940 c. 29.