Income and Corporation Taxes Act 1988

[F3 432E Section 432B apportionment: participating funds. U.K.

[F4 (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) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) F6 . . . 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 [F7 life assurance business or to gross roll-up business].

(2A) In a case where [F8 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 [F9 or by virtue of section F10 . . . [F11 [F12 444AB, F13 . . . ][F14 444AEA,][F15 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

[F16 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)

[F17 section 444AB F18 . . . of this Act;]

(ab)

[F19 section 444AEA [F20 or 444AECA] of this Act;]

(b)

F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

[F21 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 [F22 (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 [F23 linked] to that category of business [F24 and foreign [F25 business] assets], and

(b) the part of the net amount F26 . . . that is attributable to assets [F23 linked] to that category of business [F27 F28 . . . ].

(4) [F29 Subject to subsection (4A) below, for] the purposes of subsection (3) above “the applicable percentage”, in any case, [F30 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 and foreign [F25 business] assets; 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 F31 . . . .]

[F32 (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 [F33 or foreign [F25 business] assets] is nil then, for the purposes of subsection (3) above, “the applicable percentage” is such percentage as is just and reasonable.]

(5) F34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F3 Ss. 432A-432E inserted by Finance Act 1990 (c. 29), Sch. 6 para. 4

F4 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)

F5 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

F6 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

F7 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)

F8 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)

F9 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)

F10 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

F11 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)

F12 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

F13 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)

F14 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

F15 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)

F16 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)

F17 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

F18 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)

F19 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

F20 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)

F21 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)

F22 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)

F23 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))

F24 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)

F25 Words in s. 432E(3)(a)(4)(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)(c)

F26 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)

F27 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)

F28 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)

F29 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)

F30 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)

F31 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)

F32 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)

F33 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)

F34 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)

C1 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

C2 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)

C3 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)

C4 For orders see Part III Vol.5 (under

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