Finance Act 2003

Transfers of business

23 (1) Section 442A of the Taxes Act 1988 (investment return treated as accruing in respect of reinsured risk) is amended as follows.

(2) In subsection (1), for “over the period of” substitute “while the risk remains reinsured by the company under”.

(3) After subsection (3) insert—

“(3A) Where a transfer of the reinsurance arrangement from one insurance company (“the transferor”) to another (“the transferee”) is effected by novation or an insurance business transfer scheme, for the purpose of calculating the investment return to be treated as accruing to the transferee in respect of the policy or contract after the transfer, the references to the company in subsection (3)(a), (b) and (c) above include (as well as the transferee)—

(a) the transferor, and

(b) any insurance company from which the reinsurance arrangement was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.”.

(4) In subsection (4), omit “to the company”.

(5) This paragraph has effect in relation to transfers of reinsurance arrangements taking place on or after 1st January 2003.