PART XII U.K. SPECIAL CLASSES OF COMPANIES AND BUSINESSES

CHAPTER I U.K. INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS

[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 432YA Long-term 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 [F4 (“the relevant amount”)] is shown in paragraph 4(12) of Appendix 9.4 to the periodical return for the company for [F5 a] period of account which ends on or after 31st December 2006 [F6 but before 1st January 2009 (a “relevant period of account”)].

[F7 (2) In computing profits of long-term business which is not life assurance business in accordance with the provisions applicable to Case I of Schedule D—

(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) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In this section—

• “long term business provision” has the same meaning as in [F10 Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008];

• F11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F12 (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 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 section 432YA.]]

Textual Amendments

F3 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

F4 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)

F5 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)

F6 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)

F7 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)

F8 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

F9 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)

F10 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)

F11 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

F12 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)