Modification of section 83 of the Finance Act 1989
28.—(1) Paragraph (2) prescribes a modification of section 83 of the Finance Act 1989(1) so far as it applies to the life or endowment business carried on by annual return societies.
(2) After subsection (2E) insert the following subsections—
“(2F) Where, in a case where the expenses charged in the management fund exceed the amount transferred from all revenue account funds, the amount determined in accordance with subsection (2G) below shall be taken into account as an increase in value of the assets of the long-term insurance fund.
(2G) Subject to subsection (2I) below, that amount is the amount found by—
(a)taking the aggregate amount of the society’s investment income recognised in the account of the management fund;
(b)either adding any increase in value of the assets of the management fund, or subtracting any decrease in value of the assets of the management fund, as the case may be; and
(c)multiplying the amount so found by the fraction specified in subsection (2H) below.
(2H) That fraction is the fraction of which—
(a)the numerator is the amount transferred from the revenue account recognised for the purposes of section 83A(2), and
(b)the denominator is the amount transferred from all revenue account funds.
(2I) Where, apart from this subsection, the amount determined in accordance with subsection (2G) above would be a negative amount, the amount determined in accordance with that subsection shall be taken to be nil.”.
Subsections (2A) to (2E) were inserted by paragraph 2 of Schedule 33 to the Finance Act 2003.