1(1)Section 460 of ICTA (exemption from tax in respect of life or endowment business) is amended as follows.U.K.
(2)In subsection (10A), after “the transfer” insert “ , other than any to which subsection (11) or (12) below applied immediately before the transfer had effect, ”.
(3)In subsection (11), for “thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.” substitute “ continue to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it. ”
(4)For subsection (12) substitute—
“(12)Where at any time an insurance company acquires by way of transfer of engagements from a friendly society any life or endowment business consisting of business which—
(a)relates to contracts made before that time; and
(b)immediately before that time was tax exempt life or endowment business,
that business shall continue to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it.
(13)But if any contracts constituting or forming part of the business of a company covered by subsection (11) or (12) above are varied during an accounting period of the company so as to increase the premiums payable under them, the business relating to those contracts is not exempt from corporation tax for that or any subsequent accounting period.
(14)For the purposes of the Corporation Tax Acts any part of a company's business which is exempt from corporation tax by virtue of subsection (11) or (12) above shall be treated as a separate business from any other business carried on by the company.”
(5)Insert at the end—
“(15)The Treasury may by regulations provide that, where any part of the business of a company is exempt from corporation tax by virtue of subsection (11) or (12) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
(16)Regulations under subsection (15) above—
(a)may make different provision for different cases,
(b)may include any incidental, supplementary, consequential or transitional provisions which the Treasury consider appropriate, and
(c)may include retrospective provision.”