Finance Act 1989

83 Receipts to be brought into account. U.K.

(1) Where the profits of an insurance company in respect of its life assurancebusiness are, for the purposes of the Taxes Act 1988, computed in accordancewith the provisions of that Act applicable to Case I of Schedule D, then, sofar as referable to that business, the following items, as brought intoaccount for a period of account (and not otherwise), namely,—

(a) the company’s investment income from the assets of its long-term businessfund, and

(b) any increase in the value (whether realised or not) of those assets,

shall be taken into account as receipts of the period; and if for anyperiod of account there is a reduction in the value referred to in paragraph(b) above (as brought into account for the period), that reduction shall betaken into account as an expense of that period.

(2) Except in so far as regulations made by the Treasury otherwise provide,in subsection (1) above “brought into account” means broughtinto account in the revenue account prepared for the purposes of the M1 Insurance Companies Act 1982.

(3) Subject to subsection (5) below, this section has effect with respect toperiods of account ending on or after 1st January 1990; and the followingprovisions of this section shall apply for the purposes of the application ofthis section to any such period which begins before that date (in this sectionreferred to as a “straddling period”).

(4) Subject to subsection (5) below, for the purposes referred to insubsection (3) above, it shall be assumed that the straddling period consistsof two separate periods of account,—

(a) the first beginning at the beginning of the straddling period and endingon 31st December 1989 (in this section referred to as “the first notionalperiod”); and

(b) the second beginning on 1st January 1990 and ending at the end of thestraddling period (in this section referred to as “the second notionalperiod”);

and any reference in subsection (6) or subsection (7) below to a timeapportionment is a reference to an apportionment made by reference to therespective lengths of the two notional periods.

(5) In the case of any company which, by notice in writing given to theinspector on or before 31st December 1992, so elects,—

(a) subsections (3) and (4)(b) above shall have effect as if for “1stJanuary 1990”there were substituted “14th March 1989”; and

(b) subsection (4)(a) above shall have effect as if for “31st December”there were substituted “13th March”.

(6) To determine the profits of the first notional period,—

(a) in the first instance the profits of the straddling period shall becomputed as if subsections (1) and (2) above did not apply with respect to anypart of that period; and

(b) there shall then be determined that part of the profits computed under paragraph (a) above which, on a time apportionment, is properly attributable to the first notional period.

(7) To determine the profits of the second notional period,—

(a) in the first instance the profits of the straddling period shall be computed as if subsections (1) and (2) above applied with respect to the wholeof that period; and

(b) there shall then be determined that part of the profits computed under paragraph (a) above which, on a time apportionment, is properly attributableto the second notional period.

Modifications etc. (not altering text)

C1 S. 82 subs. (1)(2) and (4) and s. 83apply to profitschargeable under Schedule D (see Income and Corporation TaxesAct 1988 (c. 1, SIF 63:1), s. 441)

C2 S. 83 modified (retrospective to 1.1.1995) by S.I. 1997/473, regs. 1(2), 33, 34

C3 See Income and Corporation Taxes Act 1988 (c. 1,SIF 63:1), s. 432B to E—rules for determining amounts referable tolife assurance business

C4 S. 83(1) restricted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 65(2)(d)(5)

C5 See S.I. 1989/2417, reg. 5 (in PartIII Vol. 5)for the omission of subs. (2)in the case of life endowment business carried on by registered friendly societies (but S.I. 1989/2417 was revoked (31.7.1992) by S.I. 1992/1655, regs. 1, 22 and deemed never to have had effect).

S. 83(2) modified (31.7.1992 with effect for accounting periods beginning on and after 1.1.1990) by S.I. 1992/1655, regs. 1,18.

Marginal Citations

M1 1982c. 50.