439 Restricted government securities.U.K.
[F1(1)For the purposes of this Chapter restricted government securities shall be treated as linked solely to pension business.
(2)In this section]“restricted government securities” means, subject to the following provisions of this section, government securities issued on the condition that, except in such circumstances as may be specified in the conditions of issue, they are to be held by insurance companies against and applied solely towards meeting pension business liabilities.
(6)M1Subject to subsection (7) below, the following Treasury Stock, namely—
(a)2 per cent. Index-linked Treasury Stock 1996;
(b)2 per cent. Index-linked Treasury Stock 2006;
(c)2 per cent. Index-linked Treasury Stock 2011;
are not restricted government securities for the purposes of this section.
(7)If any of the index-linked stock referred to in subsection (6) above was on 27th March 1982 held by an insurance company against and applied solely towards meeting the liabilities of the company’s pension business, then—
(a)M2if and so long as the stock continues to be so held by that company, it shall continue to be treated as restricted government securities for the purposes of this section; and
(b)M3if the stock ceases to be restricted government securities otherwise than by virtue of being actually disposed of or redeemed, on the day on which it so ceases the stock shall be deemed for the purposes of corporation tax, including (subject to subsection (8)below) F2 corporation tax on chargeable gains, to have been disposed of and immediately re-acquired at its market value on that date.
(8)M4For the purposes of sections 67and 68of the 1979Act (gilt-edged securities)—
(a)in ascertaining the date on which securities were acquired, no account shall be taken of any deemed disposal and reacquisition resulting from subsection (7)(b)above; and
(b)so long as any index-linked stock continues, by virtue of subsection (7)(a)above, to be treated as restricted government securities for the purposes of this section, it shall be regarded as being stock of a different kind from the index-linked stock referred to in subsection (6)above which is not so treated. F3
Textual Amendments
F11990 s.41and Sch.6 para.7on and after 1January 1990subject to the commencement provisions of paras.11and 12.Previously
“(1) This section applies where for any accounting period—(a) any division falls to be made between the pension business and any other kind of long-term business of an insurance company, and (b) any of the income or gains or losses of the company for that period relate to restricted government securities; and where this section applies section 431(3) shall have effect subject to the provisions of this section. (2) All income, gains or losses of the company which relate to restricted government securities shall be referred to its pension business. (3) Where the division of the other income, gains or losses of the company is made by reference to the liabilities at any time in the accounting period which are referable to pension business or to two or more kinds of business including pension business, those liabilities shall be treated as reduced by the appropriate amount. (4) In subsection (3) above “the appropriate amount” means—(a) in a case in which the total liabilities of the company at the time in question which are referable to long-term business are less than the market value at that time of the investments and deposits held by the company relating to all such business, such proportion of the market value of the restricted government securities held by the company at that time as those liabilities bear to the market value of those investments and deposits, and (b) in any other case, the market value of the restricted government securities at that time. (5) In this section— “long-term business” has the same meaning as in section 1(1) of the Insurance Companies Act 1982;”.
F2 Repealed by 1990 s.132and Sch.19 Part IV.
F3 Repealed by 1990 s.132and Sch.19 Part IV.
Marginal Citations
M1Source—1982 s.58(1), (3)
M2Source—1982 s.58(4)
M3Source—1982 s.58(5)
M4Source—1982 s.58(6)