Income and Corporation Taxes Act 1988

[F1 438B Income or gains arising from property investment LLP U.K.

(1) Where an asset held by an insurance company as an asset of its [F2 long-term insurance fund] is held by the company as a member of a property investment LLP, the policy holders’ share of any income arising from, or chargeable gains accruing on the disposal of, the asset which—

(a) is attributable to the company, and

(b) would otherwise be referable by virtue of section 432A to pension business,

shall be treated for the purposes of the Corporation Tax Acts as referable to basic life assurance and general annuity business.

(2) For the purposes of this section the property business of the insurance company for the purposes of which the asset is held shall be treated as a separate business.

“Property business” means a Schedule A business or overseas property business.

(3) Where (apart from this subsection) an insurance company would not be carrying on basic life assurance and general annuity business, it shall be treated as carrying on such business if any income or chargeable gains of the company are treated as referable to the business by virtue of subsection (1) above.

(4) A company may be charged to tax by virtue of this section—

(a) notwithstanding section 439A, and

(b) whether or not the income or chargeable gains to which subsection (1) above applies is taken into account in computing the profits of the company for the purposes of any charge to tax in accordance with Case I of Schedule D.

(5) The policy holders’ share of income or chargeable gains to which subsection (1) above applies—

(a) shall not be treated as relevant profits for the purposes of section 88 of the Finance Act 1989 (corporation tax on policy holders’ fraction of profits), F3 . . .

(b) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

but the whole of the income or gains to which that subsection applies shall be chargeable to tax at the rate provided by [F4 that section].

(6) So far as income is brought into account as mentioned in section 83(2) of the Finance Act 1989, sections 432B to 432F (apportionment of receipts brought into account) have effect as if subsection (1) above did not apply.]

Textual Amendments

F1 Ss. 438B, 438C inserted (6.4.2001) by Finance Act 2001 (c. 9), s. 76, Sch. 25 para. 5

F2 Words in s. 438B(1) substituted (1.12.2001 with effect in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 52(1)(f)

F3 S. 438B(5)(b) repealed (with effect in accordance with Sch. 33 para. 13(11) of the repealing Act) by Finance Act 2003 (c. 14), Sch. 33 para. 13(6)(a), Sch. 43 Pt. 3(12), Note 3

F4 Words in s. 438B(5) substituted (with effect in accordance with Sch. 33 para. 13(11) of the amending Act) by Finance Act 2003 (c. 14), Sch. 33 para. 13(6)(b)

Modifications etc. (not altering text)

C1 S. 438B modified (with effect in accordance with regs. 21A(5), 21B(3) of the modifying S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473), regs. 21A, 21B (as inserted (1.1.2002) by The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 2001 (S.I. 2001/3975), regs. 1, 6) (and as amended by: S.I. 2003/23, regs. 1, 7; S.I. 2004/822, regs. 1, 16, 17)

C2 S. 438B modified (12.8.2005 with effect in accordance with reg. 1(2) of the modifying S.I.) by The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 2005 (S.I. 2005/2014), regs. 1(1), 15; and that modifying reg. 15 is omitted (14.8.2007 with effect in accordance with reg. 1(1)(2) of the revoking S.I.) by virtue of S.I. 2007/2134, reg. 15