1999 No. 498

INCOME TAX

The Insurance Companies (Capital Redemption Business) (Modification of the Corporation Tax Acts) Regulations 1999

Made1st March 1999

Laid before the House of Commons2nd March 1999

Coming into force23rd March 1999

The Treasury, in exercise of the powers conferred on them by section 458A of the Income and Corporation Taxes Act 19881, hereby make the following Regulations:

Citation, commencement and effect1

These Regulations may be cited as the Insurance Companies (Capital Redemption Business) (Modification of the Corporation Tax Acts) Regulations 1999, shall come into force on 23rd March 1999 and shall have effect with respect to accounting periods of insurance companies ending on or after 1st July 1999.

Interpretation2

In these Regulations–

“capital redemption business” means any capital redemption business within the meaning of section 458 of the Taxes Act2 other than business referred to in subsection (4) of that section;
“the life assurance provisions of the Corporation Tax Acts” shall be construed in accordance with section 458A(4) of the Taxes Act;
“the Taxes Act” means the Income and Corporation Taxes Act 1988.

Application of life assurance provisions of the Corporation Tax Acts to capital redemption business3

The life assurance provisions of the Corporation Tax Acts specified in regulations 4 to 16 shall have effect in relation to any insurance company carrying on capital redemption business–

a

as if the company’s capital redemption business were life assurance business; and

b

as respects its capital redemption business, with the modifications provided for in those regulations.

Modifications of section 76 of the Taxes Act4

1

Section 763 of the Taxes Act shall be modified as follows.

2

Subsection (5A) shall be omitted.

3

In subsection (6) the words from “or to any” to the end shall be omitted.

4

In subsection (8) the definition of “capital redemption business” shall be omitted.

Modifications of section 431 of the Taxes Act5

1

Section 431 of the Taxes Act shall be modified as follows.

2

In subsection (2)–

a

after the definition of “basic life assurance and general annuity business”4 there shall be inserted the following definition–

“capital redemption business” has the same meaning as in section 458;

b

in the definition of “life assurance business” there shall be added at the end the words “and capital redemption business”.

Modification of section 431B of the Taxes Act6

1

Section 431B of the Taxes Act5 shall be modified as follows.

2

In subsection (1) after the words “life assurance business” there shall be inserted the words “, other than its capital redemption business,”.

Modification of section 458 of the Taxes Act7

1

Section 458 of the Taxes Act shall be modified as follows.

2

Subsections (1) and (2) shall be omitted.

Modification of Schedule 19AC to the Taxes Act8

1

Schedule 19AC to the Taxes Act6 shall be modified as follows.

2

In paragraph 5(1), in paragraph (a) of the subsection (6A) notionally inserted in section 76 of the Taxes Act, the words “or capital redemption business”7 shall be omitted.

Modification of section 44 of the Finance Act 19899

1

Section 44 of the Finance Act 1989 shall be modified as follows.

2

After subsection (12) there shall be inserted the following subsection–

12A
In subsection (12) above “life assurance business” has the same meaning as in Chapter I of Part XII of the Taxes Act 1988.

Modification of section 82 of the Finance Act 198910

1

Section 82 of the Finance Act 19898 shall be modified as follows.

2

After subsection (8) there shall be added the following subsection–

9
In this section and in sections 83, 83AA9, 85, 86, 88, 88A10 and 89, and in paragraph 1A(1) of Schedule 8A11, “life assurance business” has the same meaning as in Chapter I of Part XII of the Taxes Act 1988.

Modification of section 213 of the Taxation of Chargeable Gains Act 199211

1

Section 213 of the Taxation of Chargeable Gains Act 199212 shall be modified as follows.

2

In subsection (1A) for the words from “which” to the end there shall be substituted the words “which are referable to basic life assurance and general annuity business”.

Modification of section 214 of the Taxation of Chargeable Gains Act 199212

1

Section 214 of the Taxation of Chargeable Gains Act 1992 shall be modified as follows.

2

In subsection (1)(c) (definition of “relevant linked liabilities”) after the words “general annuity business” there shall be inserted the words “, other than capital redemption business,”.

Modification of section 65 of the Finance (No. 2) Act 199213

1

Section 65 of the Finance (No. 2) Act 199213 shall be modified as follows.

2

In subsection (3)(b) there shall be added at the end the words “and capital redemption business”.

Modification of Schedule 18 to the Finance Act 199414

1

Schedule 18 to the Finance Act 1994 shall be modified as follows.

2

In paragraph 1A(1)14 the words “or capital redemption business” shall be omitted.

Modifications of Schedule 11 to the Finance Act 199615

1

Schedule 11 to the Finance Act 1996 shall be modified as follows.

2

In paragraph 1(1)(a) and (2) the words “or capital redemption business”, in both places where they occur, shall be omitted.

3

In paragraph 2–

a

for sub-paragraph (1) there shall be substituted the following paragraph–

1
Where an insurance company carries on basic life assurance and general annuity business, a separate computation, using only the non-trading credits and non-trading debits referable to that business, shall be made for the purposes of this Chapter in relation to that business.

b

in sub-paragraph (3) for the words from “Where” to “capital redemption business,” there shall be substituted the words “Where an insurance company carries on life assurance business or any category of life assurance business,”.

4

In paragraph 4–

a

in sub-paragraph (1) for the words from “paragraph 2 above” to “capital redemption business,” there shall be substituted the words “paragraph 2 above for basic life assurance and general annuity business,”;

b

in sub-paragraph (2)(a) for the words “the relevant category of business” there shall be substituted the words “basic life assurance and general annuity business”;

c

in sub-paragraph (7) for the words “the relevant category of business” there shall be substituted the words “its basic life assurance and general annuity business”;

d

in sub-paragraph (10) for the words “the relevant category of business” there shall be substituted the words “basic life assurance and general annuity business”;

e

in sub-paragraph (16) the definition of “the relevant category of business” and the word “and” immediately preceding it shall be omitted.

5

In paragraph 6–

a

the definition of “capital redemption business” shall be omitted;

b

in the definition of “life assurance business” after the words “annuity business” there shall be inserted the words “or capital redemption business”.

Modification of paragraph 19 of Schedule 12 to the Finance Act 199716

1

Paragraph 19 of Schedule 12 to the Finance Act 199715 shall be modified as follows.

2

After sub-paragraph (4) there shall be added the following sub-paragraph–

5
In this paragraph “life assurance business” has the same meaning as in Chapter I of Part XII of the Taxes Act 1988.

Bob AinsworthJim DowdTwo of the Lords Commissioners of Her Majesty’s Treasury1st March 1999

(This note is not part of the Regulations)

These Regulations provide that provisions of the Corporation Tax Acts relating to life assurance business of insurance companies (“the life assurance provisions”) shall have effect in relation to capital redemption business of those companies as if capital redemption business were life assurance business. The Regulations also provide that the life assurance provisions shall have effect as described above with the modifications set out in the Regulations. The Regulations have effect in relation to accounting periods ending on or after 1st July 1999, being the day appointed under section 199 of the Finance Act 1994 for the purposes of corporation tax self-assessment.

Regulation 1 provides for citation, commencement and effect, and regulation 2 for interpretation.

Regulation 3 applies the life assurance provisions specified in regulations 4 to 16 to capital redemption business of insurance companies.

Regulations 4 to 16 make various modifications of the life assurance provisions as respects capital redemption business.