22 Lloyd’s underwriters.U.K.
(1)In section 171 of the M1Finance Act 1993 (taxation of profits, and allowance of losses, of non-corporate members) after subsection (2A) there shall be inserted—
“(2B)Section 231(1) of the Taxes Act 1988 (entitlement to tax credit) shall not apply where the distribution there mentioned is a distribution in respect of any asset of a member’s premiums trust fund.”
(2)In section 219 of the M2Finance Act 1994 (taxation of profits of corporate members) at the beginning of subsection (3) there shall be inserted “ Subject to subsection (4A) below, ”.
(3)In subsection (4) of that section (subsection (2) applies in relation to distributions and associated tax credits notwithstanding section 11(2)(a) or 208 of the Taxes Act 1988)—
(a)for “dividends or other distributions of a company resident in the United Kingdom” there shall be substituted “ UK distributions ”; and
(b)the words “(and any associated tax credits)” shall cease to have effect.
(4)After that subsection there shall be inserted—
“(4A)Notwithstanding anything in section 11(2)(a) or 208 of the Taxes Act 1988, UK distributions in respect of any assets of a corporate member which are mentioned in paragraph (a) or (b) of subsection (3) above—
(a)shall be taken into account in computing profits of the corporate member for tax purposes; and
(b)shall be so taken into account under Case I of Schedule D (and not under any other Schedule or any other Case of Schedule D).
(4B)Section 231(1) of the Taxes Act 1988 (entitlement to tax credit) shall not apply where the distribution there mentioned is a distribution in respect of any asset of a corporate member’s premiums trust fund.
(4C)In this section “UK distributions” means dividends or other distributions of a company resident in the United Kingdom.”
(5)In section 20(1) of the Taxes Act 1988, as amended by section 24(10) below, in paragraph 2 of Schedule F (distribution in respect of which a person is entitled to a tax credit treated for the purposes of the Tax Acts, other than section 95(1), as representing income equal to the aggregate of the distribution and the tax credit) after “95(1)” there shall be inserted “ of this Act and section 219(4A) of the Finance Act 1994 ”.
(6)In section 231(1) of the Taxes Act 1988 (recipient of distribution made by UK resident company entitled to tax credit subject to sections 247 and 441A) after “441A,” there shall be inserted “ section 171(2B) of the Finance Act 1993 and section 219(4B) of the Finance Act 1994, ”.
(7)This section has effect in relation to distributions made on or after 2nd July 1997.