22.—(1) Paragraphs (3) and (4) prescribe modifications of section 440 of the Taxes Act(1) so far as it applies to the life or endowment business carried on by friendly societies in a case where, on or after 1st January 1995—
(a)a non-directive society becomes a directive society, or
(b)a non-directive society, pursuant to conditions imposed by the Friendly Societies Commission under section 37(8) of the Friendly Societies Act 1992, separates the funds maintained in respect of the society’s long term business from other funds maintained in respect of the society’s business.
(2) Paragraphs (3) and (4) also prescribe modifications of section 440 of the Taxes Act in relation to prescribed transactions taking place on or after 1st January 1995.
(3) In subsection (1), before the words “If at any time” there shall be inserted the words “Subject to subsection (4A) below,”
(4) After subsection (4) there shall be inserted—
“(4A) Subsection (1) above shall not have effect in relation to any assets which—
(a)cease to be within the category set out in paragraph (e) of subsection (4) above and come within the category set out in paragraph (f) of that subsection, or
(b)cease to be within the category set out in paragraph (f) of subsection (4) above and come within the category set out in paragraph (e) of that subsection.”
Section 440 was substituted by paragraph 8 of Schedule 6 to the Finance Act 1990, and amended by paragraph 14(22) of Schedule 10 to the Taxation of Chargeable Gains Tax Act 1992, and paragraphs 5 and 28(3) of Schedule 8 and paragraph 1(1) and (2)(b) of Schedule 9 to the Finance Act 1995 and paragraph 25 of Schedule 14 to the Finance Act 1996.