- Latest available (Revised)
- Point in Time (31/07/1997)
- Original (As enacted)
Version Superseded: 22/07/2004
Point in time view as at 31/07/1997. This version of this provision has been superseded.
You are viewing this legislation item as it stood at a particular point in time. A later version of this or provision, including subsequent changes and effects, supersedes this version.
Note the term provision is used to describe a definable element in a piece of legislation that has legislative effect – such as a Part, Chapter or section.
There are currently no known outstanding effects for the Finance Act 1996, Section 164.
Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.
(1)For subsections (2) to (5) of section 76 of the Taxes Act 1988 there shall be substituted the following subsections—
“(2)Where, in the case of any such company, the amount mentioned in paragraph (a) of subsection (2A) below exceeds for any accounting period the amount mentioned in paragraph (b) of that subsection, the amount which by virtue of this section is to be deductible by way of management expenses for that period shall be equal to the basic deduction for that period reduced by the amount of the excess.
(2A)Those amounts are—
(a)the amount which would be the profits of the company’s life assurance business for that period if computed in accordance with the provisions applicable to Case I of Schedule D and adjusted in respect of losses; and
(b)the amount (including any negative amount) produced by deducting the following aggregate amount from the company’s relevant income for that period from its life assurance business, that is to say, the aggregate of—
(i)the basic deduction,
(ii)any non-trading deficit on the company’s loan relationships which is produced for that period in relation to that business by a separate computation under paragraph 2 of Schedule 11 to the Finance Act 1996,
(iii)any amount which in pursuance of a claim under paragraph 4(3) of that Schedule is carried back to that period and (in accordance with paragraph 4(5) of that Schedule) applied in reducing profits of the company for that period, and
(iv)any charges on income for that period so far as they consist in annuities or other annual payments that are referable to the company’s life assurance business and, if they are not annuities, are payable by the company wholly or partly in satisfaction of claims under insurance policies.
(2B)For the purposes of subsection (2A) above a company’s relevant income for any accounting period from its life assurance business is the sum of the following—
(a)the income and gains of the company’s life assurance business for that accounting period; and
(b)the relevant franked investment income of the company for that period so far as it arises from assets held for the purposes of that business and is not included in the income and gains mentioned in paragraph (a) above.
(2C)The adjustment in respect of losses that is to be made for any accounting period under paragraph (a) of subsection (2A) above is a deduction of the amount equal to the unused part of the sum which—
(a)by reference to computations made in respect of the company’s life assurance business in accordance with the provisions applicable to Case I of Schedule D, and
(b)disregarding section 434A(2),
would fall, in the case of the company, to be set off under section 393 against the company’s income for that period.
(2D)For the purposes of subsection (2C) above, an amount is unused to the extent that it has not been taken into account for any previous accounting period in determining the amount by reference to which the following question was answered, namely, the question whether, and by how much, the amount deductible by virtue of this section by way of management expenses was less than the basic deduction.
(5)Subject to paragraph 4(11) to (13) of Schedule 11 to the Finance Act 1996, where the basic deduction for any period exceeds the amount which for that period is to be deductible by virtue of this section by way of management expenses, the amount to be carried forward by virtue of section 75(3) (including the amount to be so carried forward for the purpose of computing the amount of the basic deduction for any period) shall be increased by the amount of the excess.”
(2)In subsection (8) of that section—
(a)after the definition of “authorised person” there shall be inserted the following definition—
““basic deduction”, in relation to an accounting period of an insurance company, means the amount which, by virtue of this section, would be deductible by way of management expenses for that period but for subsection (2) above;”
and
[F1(b)after the definition of “recognised self-regulating organisation” there shall be inserted the following definition—
““relevant franked investment income”, in relation to any insurance company, means any franked investment income of the company in so far as it is not income the tax credits comprised in which may be claimed by the company under section 438(4) or 441A(7);”.]
(3)In paragraph 5 of Schedule 19AC to the Taxes Act 1988 (modification of section 76)—
[F1(a)in sub-paragraph (1), in the subsection (6B) treated as inserted in section 76, for “their” there shall be substituted “ its ” and the words “ and subsections (2) and (3)(b) above ” shall be omitted; and]
(b)after that sub-paragraph there shall be inserted the following sub-paragraph—
“(1A)In section 76 references to franked investment income shall be treated as being references to UK distribution income within the meaning of paragraph 5B of this Schedule.”
(4)In section 56(4) of the Taxes Act 1988 (which contains a reference to the computation required by section 76(2) of that Act), for “by” there shall be substituted “ for the purposes of ”.
(5)Subject to subsection (6) below, this section has effect in relation to accounting periods beginning on or after 1st January 1996.
(6)Notwithstanding anything in the previous provisions of this section, section 76 of the Taxes Act 1988 has effect in relation to accounting periods beginning on or after 1st January 1996—
(a)as if the reference in subsection (2D) of that section to a previous accounting period included a reference to an accounting period beginning before that date, and
(b)in relation to such a previous accounting period, as if the references—
(i)to the amount deductible by virtue of this section, and
(ii)to the basic deduction,
were to be construed by reference to whatever provisions had effect in relation to that previous period for purposes corresponding to those of that section as amended by this section.
Textual Amendments
F1S. 164(2)(b)(3)(a) repealed (31.7.1997 with effect as mentioned in Sch. 8 Pt. II(6), Note) by 1997 c. 58, s. 52, Sch. 8 Pt. II(6)
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: