Income and Corporation Taxes Act 1988

434 Franked investment income etc. U.K.

[F1 [F2 (1) Section 208 shall not apply in relation to—

(a) the charge to corporation tax on the life assurance profits of an insurance company computed in accordance with the provisions of this Act applicable to Case I of Schedule D; or

(b) any computation of such profits in accordance with those provisions.

(1A) Paragraph 2 of Schedule F shall not have effect for the purposes of subsection (1)(a) or (b) above, F3 . . . .

(1B) The reference in subsection (1) above to the life assurance profits of an insurance company is a reference to the profits of the company—

(a) in respect of its life assurance business; or

(b) in respect of any category of life assurance business which it carries on.]]

(2) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F5 (3) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3A) The policy holders’ [F7 share] of the franked investment income from investments held in connection with a company’s life assurance business shall be left out of account in determining, under subsection (7) of section 13, the franked investment income forming part of the company’s profits for the purposes of that section.]

[F8 (3B) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3C) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3D) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(4) M1 Subject to subsection (5)below, the specified part shall be, in the case of any unrelieved income, the same fraction of it as the fraction which, on a computation of the profits of the company in respect of its life assurance business in accordance with the provisions applicable to Case Iof Schedule D (whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods),would be connoted by the words in section 433 “such part of those profits as belongs or is allocated to, or is reserved for, or expended on behalf of, policy holders or annuitants”. F10

(5) If the income exceeds the profits as computed in accordance with the provisions applicable to Case Iof Schedule D other than section 433, the specified part shall be that fraction of the income so far as not exceeding the profits, together with the amount of the excess. F11

(6) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F12 (6A) For the purposes of this section—

(a) “the policy holders’ share” of any franked investment income is so much of that income as is not the shareholders’ share within the meaning of section 89 of the Finance Act 1989, F13 . . .

[F14 (aa) F15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ab) F15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ac) F15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(b) “the policy holders’ share of the relevant profits” has the same meaning as in section 88 of that Act.]

(7) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 S. 434(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. 19(2) (with Sch. 8 para. 55(2))

F2 S. 434(1)-(1B) substituted for s. 434(1) (with effect in accordance with Sch. 3 para. 3(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 3 para. 3(2)

F3 Words in s. 434(1A) repealed (with effect in accordance with Sch. 4 para. 27(2), Sch. 8 Pt. 2(10) Note of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 27(1), Sch. 8 Pt. 2(10)

F4 S. 434(2)(7) repealed (with effect in accordance with Sch. 29 Pt. 8(5) Note 2 of the repealing Act) by Finance Act 1995 (c. 4), Sch. 29 Pt. 8(5)

F5 S. 434(3)(3A) substituted for s. 434(3) by Finance Act 1989 (c. 26), s. 84(4)-(6), Sch. 8 para. 3(1)

F6 S. 434(3)(6)(8) repealed (with effect in accordance with Sch. 3 para. 25(5)(6) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 25(2)-(4), Sch. 27 Pt. 3(2), Note

F7 1990 s.45(5).Previously

“fraction”.

F8 S. 434(3B)-(3D) inserted (3.5.1994) by Finance Act 1994 (c. 9), Sch. 16 para. 5(4)

F9 S. 434(3B)-(3D) repealed (with effect in accordance with Sch. 6 para. 3(4) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 6(2), Sch. 8 Pt. 2(11), Note

F10 Repealed by 1989 ss.84and 187and Sch.8 para.3(2)and Sch.17 Part IVwith respect to accounting periods beginning on or after 1January 1990.

F11 Repealed by 1989 ss.84and 187and Sch.8 para.3(2)and Sch.17 Part IVwith respect to accounting periods beginning on or after 1January 1990.

F12 1990 s.45(7).

F13 Word at the end of s. 434(6A)(a) repealed (3.5.1994) by Finance Act 1994 (c. 9), Sch. 16 para. 5(5), Sch. 26 pt. 5(16)

F14 S. 434(6A)(aa)-(ac) inserted (3.5.1994) by Finance Act 1994 (c. 9), Sch. 16 para 5(5)

F15 S. 434(6A)(aa)-(ac) repealed (with effect in accordance with Sch. 6 para. 6(4) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 6(3), Sch. 8 Pt. 2(11), Note

Modifications etc. (not altering text)

C1 S. 434 amended (27.7.1993) by 1993 c. 34, s. 78(6)(11)

C2 S. 434(1)(1A)(1C)(1D) restricted by (Finance (No. 2) Act 1992 (c. 48), s. 65 (as amended (31.7.1997) by (Finance (No. 2) Act 1997 (c. 58), Sch. 3 para. 15)

C3 S. 434(1A) modified by The Individual Savings Account (Insurance Companies) Regulations 1998 (S.I. 1998/1871), regs. 5, 12A (as amended (22.8.2000) by The Individual Savings Account (Insurance Companies) (Amendment) Regulations 2000 (S.I. 2000/2075), regs. 1, 3)

Marginal Citations

M1 Source—1970 s.310(6)