PART XIIU.K. SPECIAL CLASSES OF COMPANIES AND BUSINESSES

CHAPTER IU.K. INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS

Modifications etc. (not altering text)

C2Pt. 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))

[F1Miscellaneous provisions relating to life assurance business]U.K.

Textual Amendments

F1Cross-heading before s. 434 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(4) (with Sch. 8 para. 55(2))

436[F2Pension business]: separate charge on profits.U.K.

(1)M1Subject to the provisions of this section, profits arising to an insurance company from F3 . . . pension business shall be treated as income within Schedule D, and be chargeable under Case VI of that Schedule, and for that purpose—

(a)[F4that business] shall be treated separately, and

(b)subject to paragraph (a) above, and to subsection (3) below, the profits therefrom shall be computed in accordance with the provisions of this Act applicable to Case I of Schedule D.

(2)Subsection (1) above shall not apply to an insurance company charged to corporation tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its ordinary life assurance business.

(3)M2In making the computation referred to in subsection (1) above—

(a)[F5sections 82 and 83 of the Finance Act 1989] shall apply with the necessary modifications and in particular with the omission of all references to policy holders (other than holders of policies referable to pension business) [F6and of the words “tax or” in section 82(1)(a)];

[F7(aa)F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(b)no deduction shall be allowed in respect of any expenses of management deductible under section 76; F9

(c)there may be set off against the profits any loss, to be computed on the same basis as the profits, which has arisen from pension business F10 . . .in any previous accounting period or year of assessment;

(d)where the computation in question is of profits arising to an insurance company from pension business—

[F11(i)group income so far as referable to pension business shall be deducted from the receipts to be taken into account,]

F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .and

(e)distributions which are not qualifying distributions shall not be taken into account where the computation in question is of the profits arising to an insurance company or overseas life insurance company from F13 . . . pension business.

(4)M3Section 396 shall not be taken to apply to a loss incurred by a company on its F14 . . . pension business.

(5)M4Nothing in section 128 or 399(1) shall affect the operation of this section.

Textual Amendments

F2Words in s. 436 sidenote substituted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 51(5) (with Sch. 8 para. 55(2))

F3Words in s. 436(1) repealed (for accounting periods beginning on or after 1.1.1992) by Finance Act 1991 (c. 31, SIF 63:1), s. 48, 123, Sch. 7 paras. 4(1)(a), 18, Sch. 19 Pt.V Note 3

F4Words in s. 436(1)(a) substituted (for accounting periods beginning on or after 1. 1. 1992) by Finance Act 1991 (c. 31, SIF 63:1), s. 48, Sch. 7 paras. 4(1)(b), 18

F51989 s.84and Sch.8 para.6and, subject to s.84(6)deemed to have come into force on 14March 1989.Previously

“section 433”.

F61990 s.43(2).Subject to 1989 s.84(6)this amendment has effect with respect to accounting periods beginning on or after 1January 1990.

F7S. 436(3)(aa) inserted (with effect in accordance with Sch. 8 para. 57(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 16(4) (with Sch. 8 para. 55(2))

F8S. 436(3)(aa) repealed (with effect in accordance with Sch. 31 para. 10(2) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 31 para. 7(1)(a), Sch. 41 Pt. 5(23), Note

F9 Words repealed by 1989 ss.87(4)and 187and Sch.17 Part IVwith respect to accounting periods beginning on or after 1January 1990. (See 1989 s.87(5)in relation to straddling periods).

F10Words in s. 436(3)(c) repealed (for accounting periods beginning on or after 1.1.1992) by Finance Act 1991 (c. 31, SIF 63:1), ss. 48, 123, Sch. 7 paras. 4(2)(a), 18 Sch. 19 Pt. V, Note 3

F111990 s.41and Sch.6 para.5on and after 1January 1990subject to the commencement provisions of paras.11and 12.Previously

“(i) group income shall be not be taken into account as part of those profits, and”.

F12Words in s. 436(3)(d) repealed (with effect in accordance with Sch. 8 para. 57 of the repealing Act) by Finance Act 1995 (c. 4) Sch. 29 Pt. 8(5), Note 2

F13Words in s. 436(3)(e) repealed (for accounting periods beginning on or after 1.1.1992) by Finance Act 1991 (c. 31, SIF 63:1), ss. 48, 123, Sch. 7 paras. 4(2)(b), 18, Sch. 19 Pt. V, Note 3

F14Words in s. 436(4) repealed (for accounting periods beginning on or after 1.1.1992) by Finance Act 1991 (c. 31, SIF 63:1), ss. 48, 123, Sch. 7 paras. 4(3), 18, Sch. 19 Pt. V, Note 3

Modifications etc. (not altering text)

C4S. 436 modified (with effect in accordance with reg. 1(2) of the modifying S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), regs. 1(1), 19, 20 (as amended by S.I. 2004/822, regs. 1, 12, 14)

C5 See also 1989 s.43—certain Sch.D computations involving emoluments.

Marginal Citations

M1Source—1970 s.312(1); 1970(F) Sch.5 Part III 11(3)

M2Source—1970 s.312(2), 314(5); 1970(F) Sch.5 Part III 11(6)(a)(b); 1972 Sch.18 5(1)(a)

M3Source—1970 s.312(3); 1970(F) Sch.5 Part III 11(3)

M4Source—1985 s.72(7)