PART 4U.K.THE TREATMENT OF PARTICIPANTS IN AUTHORISED INVESTMENT FUNDS

CHAPTER 3U.K.PARTICIPANTS CHARGEABLE TO CORPORATION TAX

Dividend distributionsU.K.

[F1Companies carrying on general insurance business: treatment of certain amounts of tax as foreign taxU.K.

52A.—(1) This regulation applies if conditions A to C are met.

(2) Condition A is that—

(a)an authorised investment fund makes a dividend distribution, to which regulation 48(2) applies, to a participant carrying on general insurance business, and

(b)the distribution mentioned in sub-paragraph (a) falls to be brought into account as a trading receipt of that business.

(3) Condition B is that there is some foreign tax suffered by the authorised investment fund in respect of which relief is given or falls to be given in accordance with any arrangements having effect by virtue of section 788 of ICTA (relief by agreement with other territories) or by way of a credit under section 790(1) of that Act (unilateral relief).

(4) Condition C is that the participant—

(a)owns units which represent rights to 10% or more of the net asset value of the authorised investment fund; and

(b)does not own those units as a nominee or a bare trustee.

(5) But, for the purposes of paragraph (4), rights in an authorised investment fund held as assets of a company’s long-term insurance fund are not treated as held by the participant.

(6) For the purposes of the specified provisions, an amount equal to the participant’s portion of the foreign tax mentioned in paragraph (3) is treated as foreign tax and not as United Kingdom tax.

(7) For the purposes of paragraph (6), the participant’s portion shall be determined by reference to the proportions in which participants have rights in the authorised investment fund in the distribution period in question.

(8) In paragraph (6), “the specified provisions” means—

(a)section 804C of ICTA (insurance companies: allocation of expenses etc in computations under Case I of Schedule D), to the extent that it applies to business of a company which is not long-term business; and

(b)regulation 48.

(9) In this regulation—

“general insurance business” means the business of effecting and carrying out contracts of insurance falling within Part 1 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

“long-term business” has the meaning given in section 431(2) of ICTA (interpretative provisions relating to insurance companies).]

Textual Amendments