PART XII SPECIAL CLASSES OF COMPANIES AND BUSINESSES

C10C11C12CHAPTER I INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS

Annotations:
Modifications etc. (not altering text)
C10

Definitions in Pt. XII Chapter I (ss. 431-458) applied by Finance Act 1991 (c. 31, SIF 63:1), s. 48, Sch. 7 paras. 16(7), 18

C11

Pt. XII Chapter I (ss. 431-458) applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 212(7)(b), 289 (with ss. 60, 101(1), 171, 201(3))

F2Separation of different categories of business

Annotations:
Amendments (Textual)
F2

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))

F1C1C2C3C4C5C8C9432A Apportionment of income and gains.

F31

This section has effect where in any period an insurance company carries on more than one category of business and it is necessary for the purposes of the Corporation Tax Acts to determine in relation to the period what parts of—

a

income arising from the assets of the company’s F9long-term insurance fund, or

b

gains or losses accruing on the disposal of such assets,

are referable to any category of business.

C6C72

The categories of business referred to in subsection (1) above are—

a

pension business;

b

life reinsurance business;

c

overseas life assurance business;

F8d

basic life assurance and general annuity business; and

f

F10long-term business other than life assurance business.

3

Income arising from, and gains or losses accruing on the disposal of, assets linked to any category of business (apart from overseas life assurance business) shall be referable to that category of business.

4

Income arising from, and gains or losses accruing on the disposal of, assets of the overseas life assurance fund (and no other assets) shall be referable to overseas life assurance business.

5

There shall be referable to any category of business (apart from overseas life assurance business) the relevant fraction of any income, gains or losses not directly referable to F4any category of business.

6

For the purposes of subsection (5) above “the relevant fraction”, in relation to a category of business, is the fraction of which—

a

the numerator is the aggregate of—

i

the mean of the opening and closing liabilities of the category, reduced F11(but not below nil) by the mean of the opening and closing F12net values of any assets directly referable to the category, and

ii

the mean of the appropriate parts of the opening and closing amounts of the investment reserve; and

F13b

the denominator is the aggregate of—

i

the numerator given by paragraph (a) above; and

ii

the numerators given by that paragraph in relation to the other categories of business.

F57

For the purposes of subsections (5) and (6) above—

a

income, gains or losses are directly referable to a category of business if referable to that category by virtue of subsection (3) or (4) above, and

b

assets are directly referable to a category of business if income arising from the assets is, and gains or losses accruing on the disposal of the assets are, so referable by virtue of subsection (3) above.

F148

In subsection (6) above “appropriate part”, in relation to the investment reserve, means—

a

where none (or none but an insignificant proportion) of the liabilities of the F10long-term business are with-profits liabilities, the part of that reserve which bears to the whole the proportion A/B where—

A is the amount of the liabilities of the category of business in question;

B is the whole amount of the liabilities of the F10long-term business; and

b

in any other case, the part of that reserve 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 F10long-term business.

F69

Where a company carries on overseas life assurance business—

a

references in this section to liabilities do not include liabilities of that business, and

b

the appropriate part of the investment reserve as defined by paragraph 4(2)(a) of Schedule 19AA shall be left out of account in determining that reserve for the purposes of this section.

F159A

In this section and sections 432C and 432D “net value”, in relation to any assets, means the excess of the value of the assets over F16the value of money debts (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996) attributable to an internal linked fund which are not owed in respect of long-term liabilities.

9B

F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F710

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