Income and Corporation Taxes Act 1988

[F1 [F2 434A Computation of losses and limitation on relief. U.K.

(1) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F4 (2) Where for any accounting period the loss arising to an insurance company from its life assurance business falls to be computed in accordance with the [F5 life assurance trade profits provisions]—

(a) the loss resulting from the computation shall be reduced (but not below nil) by F6 . . . —

(i) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii) any relevant non-trading deficit for that period on the company’s debtor relationships; and

[F8 (iii) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(b) if the whole or any part of that loss as so reduced is set off—

(i) under section 393A, or

(ii) under section 403(1),

[F10 any loss for that period under section 436A shall be reduced (but not below nil) by the total of the amounts set off as mentioned in sub-paragraphs (i) and (ii) above.]]

[F11 (2A) The reference in subsection [F12 (2)(a)(ii)] above to a relevant non-trading deficit for any period on a company’s debtor relationships is a reference to the non-trading deficit on the company’s loan relationships F13 . . . for the company’s basic life assurance and general annuity business if credits and debits given in respect of the company’s creditor relationships (within the meaning of [F14 Part 5 of CTA 2009]) were disregarded.]

(3) In the case of a company carrying on life assurance business, no relief shall be allowable [F15 —

(a) under Chapter II (loss relief) or Chapter IV (group relief) of Part X,

[F16 (aa) (where the company's life assurance business is not mutual business) in respect of any amount which is a charge on income for the purposes of corporation tax,] or

(b) in respect of any amount representing a non-trading deficit on the company’s loan relationships that has been computed otherwise than by reference to debits and credits referable to that business,]

against the policy holders’ share of the relevant profits for any accounting period.

• For the purposes of this subsection “the policy holders’ share of the relevant profits” has the same meaning as in section [F17 89] of the Finance Act 1989.

[F18 (4) For the purposes of section 403, where the surrendering company is an insurance company which is charged to tax under the I minus E basis in respect of its life assurance business for the surrender period, the company's gross profits of that period do not include its relevant profits (within the meaning of section 88 of the Finance Act 1989) for that period; and expressions used in this subsection and section 403 have the same meaning here as there.]]]

Textual Amendments

F1 S. 434A inserted by Finance Act 1989 (c. 26), s. 84(4)-(6), Sch. 8 para. 4

F2 S. 434A substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para 20(1) (with Sch. 8 para. 55(2))

F3 S. 434A(1) repealed (with effect in accordance with Sch. 3 para. 4(2) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 3 para. 4(1), Sch. 8 Pt. 2(6), Note

F4 S. 434A(2) substituted (with effect in accordance with Sch. 31 paras. 2(1), 10(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 31 para. 2(1)(a)(2)

F5 Words in s. 434A(2) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 134(2) (with Sch. 2 Pts. 1, 2)

F6 Words in s. 434A(2)(a) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 23(2)(a), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F7 S. 434A(2)(a)(i) repealed (with effect in accordance with s. 38(6) of the repealing Act) by Finance (No. 2) Act 2005 (c. 22), s. 38(4), Sch. 11 Pt. 2(7), Note

F8 S. 434A(2)(a)(iii) inserted (with effect in accordance with Sch. 27 para. 12(1) of the amending Act) by Finance Act 2000 (c. 17), Sch. 27 para. 8(a)

F9 S. 434A(2)(a)(iii) repealed (with effect in accordance with s. 38(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 7 para. 23(2)(b), Sch. 27 Pt. 2(7), Note (with Sch. 7 Pt. 2)

F10 Words in s. 434A(2)(b) substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 23(3) (with Sch. 7 Pt. 2)

F11 S. 434A(2A) inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 23(2) (with Sch. 15)

F12 Words in s. 434A(2A) substituted (with effect in accordance with Sch. 31 paras. 2(1), 10(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 31 para. 2(1)(b)

F13 Words in s. 434A(2A) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 134(3)(a), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F14 Words in s. 434A(2A) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 134(3)(b) (with Sch. 2 Pts. 1, 2)

F15 Words in s. 434A(3) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 23(3) (with Sch. 15)

F16 S. 434A(3)(aa) inserted (with effect in accordance with Sch. 17 para. 22(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 22(1)

F17 Words in s. 434A(3) substituted (with effect in accordance with Sch. 33 para. 6(12) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 6(7)(b)

F18 S. 434A(4) inserted (with effect in accordance with Sch. 17 para. 21(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 21(1)

Modifications etc. (not altering text)

C1 S. 434A(2) modified (with effect in accordance with s. 105(1) of the modifying Act) by Finance Act 1996 (c. 8), Sch. 14 para. 23(1) (with Sch. 15)

C2 S. 434A(2) modified by Finance Act 1996 (c. 8), Sch. 31 para. 2(3)