LegalizeReform history
Income and Corporation Taxes Act 1988
100 versions
· 1988-02-09
2022-07-14
Income and Corporation Taxes Act 1988
2019-07-05
Income and Corporation Taxes Act 1988
2019-02-12
Income and Corporation Taxes Act 1988
2017-11-16
Income and Corporation Taxes Act 1988
2017-04-27
Income and Corporation Taxes Act 1988
2017-04-06
Income and Corporation Taxes Act 1988
2016-12-14
Income and Corporation Taxes Act 1988
2016-09-15
Income and Corporation Taxes Act 1988
2016-08-12
Income and Corporation Taxes Act 1988
2016-06-16
Income and Corporation Taxes Act 1988
2015-03-26
Income and Corporation Taxes Act 1988
2015-02-12
Income and Corporation Taxes Act 1988
2014-08-01
Income and Corporation Taxes Act 1988
2014-07-17
Income and Corporation Taxes Act 1988
2014-01-01
Income and Corporation Taxes Act 1988
2013-07-17
Income and Corporation Taxes Act 1988
2013-04-06
Income and Corporation Taxes Act 1988
2012-07-17
Income and Corporation Taxes Act 1988
2012-04-01
Income and Corporation Taxes Act 1988
2012-03-14
Income and Corporation Taxes Act 1988
2011-08-11
Income and Corporation Taxes Act 1988
2011-07-19
Income and Corporation Taxes Act 1988
2011-06-16
Income and Corporation Taxes Act 1988
2011-02-25
Income and Corporation Taxes Act 1988
2010-12-16
Income and Corporation Taxes Act 1988
2010-10-01
Income and Corporation Taxes Act 1988
2010-07-27
Income and Corporation Taxes Act 1988
2010-04-08
Income and Corporation Taxes Act 1988
Changes on 2010-04-08
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#### Retained assets
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#### “Distribution” to include certain expenses of close companies.
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#### Modifications where tax charged under section 35 of CTA 2009.
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#### “Distribution” to include certain expenses of close companies.
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#### Modifications where tax charged under section 35 of CTA 2009.
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### Corporation tax
#### Section 591C: supplementary.
#### Commencement.
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##### 265
- (1) If the claimant . . . is a registered blind person for the whole or any part of the year of assessment, he shall be entitled to a blind person's allowance of £1,280. . . .
- (1A) Section 257C (indexation) shall have effect (using the rounding up rule in subsection (1)(b) of that section) for the application of this section for the year 1998-99 and any subsequent year of assessment as it has effect for the application of sections 257 and 257A.
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#### Life assurance premiums
##### 266
- (1) Subject to the provisions of this section, section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004, an eligible individual who pays any such premium as is specified in subsection (2) below . . . shall (without making any claim) be entitled to relief under this section.
- (1A) For the purposes of subsection (1) above an individual is an eligible individual if the individual—
- (a) is resident in the United Kingdom, or
- (b) meets the conditions in section 56(3) of ITA 2007.
- (2) The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where—
- (a) the payments are made to —
- (i) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or
- (ii) a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000;
- (iv) in the case of a deferred annuity, the National Debt Commissioners; and
- (b) the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse or civil partner; and
- (c) the insurance or contract was made by him or his spouse or civil partner.
- (3) Subject to subsections . . . (10) and (11) below, no relief under this section shall be given—
- (a) except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not;
- (b) in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy;
- (c) in respect of premiums payable under any policy issued in respect of an insurance made after 13th March 1984 . . . ;
- (d) in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance.
- (4) Subject to subsection (8) below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year.
- (5) Subject to the provisions of Schedule 14—
- (a) an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to 12.5 per cent of the payment; and
- (b) the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where the individual is not resident in the United Kingdom (but is entitled to relief by virtue of subsection (1A)(b)), subsection (4) above shall not apply but . . . the like relief shall be given to him under paragraph 6 of Schedule 14.
- (9) Subsections (5) and (8) above shall apply in relation to an individual who is not resident in the United Kingdom but is a member of the armed forces of the Crown or the spouseor civil partner of such a member as if the individual were so resident.
- (10) Subsection (3)(b) above shall not apply—
- (a) to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or
- (b) to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV.
- (11) Subsection (3)(a) and (d) above shall not affect premiums payable—
- (a) under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the spouse, civil partner, widow, widower , surviving civil partner or children or other dependants of any such employee or person, or
- (b) under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers.
- (12) Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section.
- (13) In . . . Schedule 14, “*friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act).
- (14) In subsection (2)(a)—
- “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and
- “member of the society” has the same meaning as in Lloyd’s Act 1982 .
#### Qualifying policies
##### 267
Schedule 15, Part I of which contains the basic rules for determining whether or not a policy is a qualifying policy, Part II of which makes provision for the certification etc. of policies as qualifying policies and Part III of which modifies Parts I and II in their application to certain policies issued by non-resident companies, shall have effect for the purpose of determining whether or not a policy is a qualifying policy; and, accordingly, any reference in this Act to a qualifying policy shall be construed in accordance with that Schedule.
#### Early conversion or surrender of life policies
##### 268
- (1) Where a policy of life insurance to which this section applies has been issued and, within four years from the making of the insurance in respect of which it was issued, any of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy;
- (b) the falling due (otherwise than on death) of a sum payable in pursuance of a right conferred by the policy to participate in profits; and
- (c) the conversion of the policy into a paid-up or partly paid-up policy;
the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender or, as the case may be, out of the sum falling due or out of the fund available to pay the sums which will be due on death or on the maturity of the policy, a sum determined in accordance with the following provisions of this section, unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the lower of the following, that is to say—
- (a) the appropriate percentage of the premiums payable under the policy up to the happening of the event; and
- (b) the surrender value of the policy at the time of the happening of the event less the complementary percentage of the premiums mentioned in paragraph (a) above.
- (3) If the event is one of those mentioned below, the sum payable to the Board shall not exceed the following limit, that is to say—
- (a) if it is the surrender of part of the rights conferred by the policy, the value of the rights surrendered at the time of the surrender;
- (b) if it is the conversion of the policy into a partly paid-up policy, the surrender value at the time of the conversion, of so much of the policy as is paid up; and
- (c) if it is the falling due of a sum, that sum.
- (4) If the event was preceded by the happening of such an event as is mentioned in subsection (1) above, subsection (2) above shall apply—
- (a) as if the lower of the amounts mentioned therein were reduced by the sum paid under this section in respect of the earlier event; and
- (b) if the earlier event was such an event as is mentioned in paragraph (a) or (c) of subsection (3) above, as if the surrender value of the policy were increased by the amount which, under that paragraph, limited or might have limited the sum payable under this section in respect of the earlier event.
- (5) For the purposes of this section the appropriate percentage, in relation to any event, is the percentage equal to the following fraction of the percentage found by doubling that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happened, that is to say—
- (a) if the event happens in the first two of the four years mentioned in subsection (1) above, three-sixths;
- (b) if it happens in the third of those years, two-sixths; and
- (c) if it happens in the last of those years, one-sixth;
and the complementary percentage, in relation to any event, is 100 per cent. less the appropriate percentage.
- (6) Where the annual amount of the premiums payable under a policy of life insurance is at any time increased (whether under the policy or by any contract made after its issue) so as to exceed by more than 25 per cent.—
- (a) if the insurance was made on or before 26th March 1974, the annual amount as at that date, or
- (b) in the case of any other insurance, the first annual amount so payable,
the additional rights attributable to the excess shall be treated for the purposes of this section as conferred by a new policy issued in respect of an insurance made at that time, and the excess shall be treated as premiums payable under the new policy.
- (7) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy of life insurance issued in connection with a registered pension scheme;
and in relation to a policy of life insurance issued in respect of an insurance made before 27th March 1974 applies only in accordance with subsection (6) above.
#### Surrender etc. of policies after four years
##### 269
- (1) Where a policy of life insurance to which this section applies has been issued and, in the fifth or any later year from the making of the insurance in respect of which it was issued, either of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy; and
- (b) the falling due (otherwise than on death or maturity) of a sum payable in pursuance of a right conferred by the policy to participate in profits;
then, if either of those events has happened before, the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender, or, as the case may be, out of the sum falling due, a sum determined in accordance with the following provisions of this section.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the applicable percentage of the lower of the following—
- (a) the total of the premiums which are payable in that year under the policy; and
- (b) the sums payable by reason of the surrender or, as the case may be, the sum falling due;
and the percentage to be applied for this purpose shall be a percentage equal to that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happens.
- (3) Where, after a sum has become payable under subsection (1) above, and within the same year from the making of the insurance, another such event happens as is mentioned therein, the sums payable under that subsection in respect of both or all of the events shall not exceed the applicable percentage of the total mentioned in subsection (2)(a) above.
- (4) Where, on the happening of an event in the fifth or any later year from the making of the insurance, any sum is payable under subsection (1) of section 268 as applied by subsection (6) of that section as well as under subsection (1) above, subsection (2) above shall apply as if the sums or sum mentioned in paragraph (b) thereof were reduced by the sum payable under that section.
- (5) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy issued in the course of an industrial insurance business; or
- (c) it was issued in respect of an insurance made before 27th March 1974.
#### Provisions supplementary to sections 268 and 269
##### 270
- (1) Where on the happening of an event in relation to a policy of life insurance a sum is payable under section 268 or 269, relief under section 266 in respect of the relevant premiums paid under the policy shall be reduced by the sum so payable or, as the case may be, by so much of the sum as does not exceed the amount of that relief (or as does not exceed so much of that amount as remains after any previous reduction under this section).
- (2) For the purposes of this section the relevant premiums are—
- (a) in relation to a sum payable under section 268, the premiums payable under the policy up to the happening of the event by reason of which the sum is payable; and
- (b) in relation to a sum payable under section 269, the premiums payable in the year (from the making of the insurance) in which the event happens by reason of which the sum is payable.
- (3) Where the relevant premiums are payable in more than one year of assessment the reduction in relief under this section shall, so far as possible, reduce relief for an earlier year of assessment before reducing relief for a later one.
- (4) Any sum paid under section 268 or 269 by reason of any event shall be treated—
- (a) as between the parties, as received by the person by whom the premiums under the policy were paid; and
- (b) for the purposes of section 266, as a sum paid by that person in satisfaction of his liability resulting from the reduction of relief under this section;
and where that sum exceeds that liability he shall be entitled, on a claim made by him not later than 4 years after the end of the year of assessment in which the event happens, to repayment of the excess.
#### Deemed surrender in cases of certain loans
##### 271
- (1) Where—
- (a) by virtue of section 465 of ITTOIA 2005 a gain arising in connection with a policy . . . would be treated as forming part of an individual’s total income; and
- (b) the policy was issued in respect of an insurance made after 26th March 1974 . . .; and
- (c) any sum is at any time after the making of the insurance . . . lent to or at the direction of that individual by or by arrangement with the body issuing the policy . . .;
then, subject to subsection (2) below, the same results shall follow under sections 268 to 270 as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy . . . and the sum had been paid as consideration for the surrender (and if the policy is a qualifying policy, whether or not the premiums under it are eligible for relief under section 266, those results shall follow under section 269, whether or not a gain would be treated as arising on the surrender).
- (2) Subsection (1) above does not apply—
- (a) in relation to a policy if—
- (i) it is a qualifying policy; and
- (ii) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Collection of sums payable under sections 268 and 269
##### 272
- (1) Any body by whom a policy to which section 268 or 269 applies has been issued shall, within 30 days of the end of each period of 12 months ending with 31st March in every year, make a return to the collector of the sums which, in that period, have become payable by it under either of those sections.
- (2) Any sum which is to be included in a return made under subsection (1) above shall be due at the time by which the return is to be made and shall be paid without being demanded.
- (3) Where any sum which was or ought to have been included in such a return is not paid by the end of the period for which the return was to be made, it may be recovered by an assessment as if it were income tax for the year of assessment in which that period ends; and where it appears to the inspector that a sum which ought to have been so included had not been included or that a return is not correct he may make such an assessment to the best of his judgment.
- (4) All the provisions of the Income Tax Acts relating to the assessment and collection of tax, interest on unpaid tax, appeals and penalties shall, with the necessary modifications, apply in relation to sums due under this section; and for the purposes of those provisions so far as they relate to interest on unpaid tax, a sum assessed in pursuance of this section shall be treated as having been payable when it would have been payable had it been included in a return under subsection (1) above.
- (5) Where, on an appeal against an assessment made in pursuance of this section, it is determined that a greater sum has been assessed than was payable, the excess, if paid, shall be repaid.
- (6) Where a body has paid a sum which is payable under section 268 or 269 it shall give within 30 days to the person by whom the sum is, under section 270(4), treated as received a statement specifying that sum and showing how it has been arrived at.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments securing widows' and children’s annuities
##### 273
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#### Limits on relief under sections 266 and 273
##### 274
- (1) The aggregate of the premiums . . . in respect of which relief is given to any person under section 266 shall not exceed £1,500 in any year of assessment or one-sixth of that person’s total income, whichever is the greater.
- (2) The aggregate of the relief given under section 266 in respect of premiums . . . payable for securing any benefits other than capital sums on death shall not exceed the amount of the income tax calculated at 12.5% on £100.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income or of £100 mentioned in this section.
### Supplemental
#### Meaning of “relative”
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#### Effect on relief of charges on income
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#### Partners
##### 277
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#### Non-residents
##### 278
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### CHAPTER II — TAXATION OF INCOME OF SPOUSES AND CIVIL PARTNERS
### General rules
#### Aggregation of wife’s income with husband's
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#### Transfer of reliefs
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#### Tax repayments to wives
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#### Construction of references to married women living with their husbands
##### 282
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### Separate assessments
#### Option for separate assessment
##### 283
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#### Effect of separate assessment on personal reliefs
##### 284
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#### Collection from wife of tax assessed on husband but attributable to her income
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#### Right of husband to disclaim liability for tax on deceased wife’s income
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### Separate taxation
#### Separate taxation of wife’s earnings
##### 287
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#### Elections under section 287
##### 288
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### CHAPTER III — ENTERPRISE INVESTMENT SCHEME
#### The relief
##### 289
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#### Minimum and maximum subscriptions
##### 290
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#### Individuals qualifying for relief
##### 291
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#### Parallel trades
##### 292
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#### Qualifying companies
##### 293
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#### Companies with interests in land
##### 294
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#### Valuation of interests in land for purposes of section 294(1)(b)
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#### Section 294 disapplied where amounts raised total £50,000 or less
##### 296
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#### Qualifying trades
##### 297
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#### Provisions supplementary to sections 293 and 297
##### 298
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#### Disposal of shares
##### 299
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#### Value received from company
##### 300
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#### Provisions supplementary to section 300
##### 301
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#### Replacement capital
##### 302
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#### Value received by persons other than claimants
##### 303
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#### Husband and wife
##### 304
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#### Reorganisation of share capital
##### 305
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#### Claims
##### 306
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#### Withdrawal of relief
##### 307
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#### Application to subsidiaries
##### 308
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#### Further provisions as to subsidiaries
##### 309
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#### Information
##### 310
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#### Nominees, bare trustees and approved investment funds
##### 311
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#### Interpretation of Chapter III
##### 312
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### CHAPTER IV — SPECIAL PROVISIONS
#### Taxation of consideration for certain restrictive undertakings
##### 313
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#### Divers and diving supervisors
##### 314
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#### Wounds and disability pensions
##### 315
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#### Allowances, bounties and gratuities
##### 316
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#### Victoria Cross and other awards
##### 317
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#### Other pensions in respect of death due to war service etc
##### 318
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#### Crown servants: foreign service allowance
##### 319
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#### Commonwealth Agents-General and official agents etc
##### 320
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#### Consuls and other official agents
##### 321
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#### Consular officers and employees
##### 322
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#### Visiting forces
##### 323
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#### Designated international organisations
##### 324
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#### Interest on deposits with National Savings Bank
##### 325
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest etc. under contractual savings schemes
##### 326
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disabled person’s vehicle maintenance grant
##### 327
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Funds in court
##### 328
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on damages for personal injuries
##### 329
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Compensation for National-Socialist persecution
##### 330
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scholarship income
##### 331
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenditure and houses of ministers of religion
##### 332
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Personal equity plans
##### 333
Regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) may include provision generally for the purpose of the administration of corporation tax in relation to plans.
### CHAPTER V — RESIDENCE OF INDIVIDUALS
#### Commonwealth citizens and others temporarily abroad
##### 334
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Residence of persons working abroad
##### 335
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Temporary residents in the United Kingdom
##### 336
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART VIII — TAXATION OF INCOME AND CHARGEABLE GAINS OF COMPANIES
### Taxation of income
#### Companies beginning or ceasing to carry on a trade
##### 337
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowance of charges on income and capital
##### 338
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charges on income: donations to charity
##### 339
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charges on income: interest payable to non-residents
##### 340
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments of interest etc. between related companies
##### 341
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax on company in liquidation
##### 342
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Company reconstructions without a change of ownership
##### 343
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Company reconstructions: supplemental
##### 344
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Chargeable gains
#### Computation of chargeable gains
##### 345
#### Capital distribution of chargeable gains: recovery of tax from shareholder
##### 346
#### Tax on one member of group recoverable from another member
##### 347
## PART IX — ANNUAL PAYMENTS AND INTEREST
### Annual payments
#### Payments out of profits or gains brought into charge to income tax: deduction of tax
##### 348
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments not out of profits or gains brought into charge to income tax, and annual interest
##### 349
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax where payments made under section 349
##### 350
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Small maintenance payments
##### 351
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Certificates of deduction of tax
##### 352
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Relief for payments of interest (excluding MIRAS)
#### General provision
##### 353
- (1) Where a person pays interest in any year of assessment, that person, if he makes a claim to the relief, shall for that year of assessment be entitled (subject to . . . section 52 of ITTOIA 2005) to relief in accordance with this section in respect of so much (if any) of the amount of that interest as is eligible for relief under this section by virtue of section 365.
- (1A) Where a person is entitled for a year of assessment to relief under this section in respect of an amount of interest which is eligible for relief by virtue of section 365, the relief is given as a tax reduction for that tax year.
- (1AA) The amount of the tax reduction is 23% of the amount of the interest.
- (1AB) The tax reduction is given effect at Step 6 of the calculation in section 23 of ITA 2007.
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1E) Where any person is entitled for any year of assessment to relief . . . in respect of any amount of interest as is eligible for that relief partly as mentioned in subsection (1A) above and partly as mentioned in section 383 of ITA 2007 (relief for interest payments), that amount of interest shall be apportioned between the cases to which each of those provisions applies without regard to what parts of the total amount borrowed remain outstanding but according to . . . —
- (a) the proportions of the total amount borrowed which were applied for different purposes; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and subsection (1A) above or section 383 of ITA 2007 shall apply accordingly to the case in which that subsection or section applies.
- (1F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) This section does not apply to a payment of relevant loan interest to which section 369 applies.
- (3) Relief under this section shall not be given in respect of—
- (a) interest on a debt incurred by overdrawing an account or by debiting the account of any person as the holder of a credit card or under similar arrangements; or
- (b) where interest is paid at a rate in excess of a reasonable commercial rate, so much of the interest as represents the excess.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans to buy land etc
##### 354
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Matters excluded from section 354
##### 355
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Job-related accommodation
##### 356
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limit on amount of loan eligible for relief by virtue of section 354
##### 357
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where borrower deceased
##### 358
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy machinery or plant
##### 359
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy interest in close company
##### 360
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy interest in co-operative or employee-controlled company
##### 361
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy into partnership
##### 362
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 360 to 362
##### 363
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to pay inheritance tax
##### 364
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy life annuity
##### 365
- (1) Subject to the following provisions of this section, interest is eligible for relief under section 353 if it is interest on a loan in respect of which the following conditions are satisfied—
- (aa) that the loan was made before 9th March 1999;
- (a) that the loan was made as part of a scheme under which not less than nine-tenths of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (“*the annuitants*”) who include the person to whom the loan was made;
- (b) that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of 65 years;
- (c) that the loan was secured on land in the United Kingdom or the Republic of Ireland and the person to whom it was made or one of the annuitants owns an estate or interest in that land; and
- (d) that, if the loan was made after 26th March 1974, the person to whom it was made or each of the annuitants used the land on which it was secured as his only or main residence immediately before 9th March 1999 .
- (1AA) Where—
- (a) a loan made on or after 9th March 1999 was made in pursuance of an offer made by the lender before that date, and
- (b) the offer was either in writing or evidenced by a note or memorandum made by the lender before that date,
the loan shall be deemed for the purposes of subsection (1)(aa) above to have been made before that date.
- (1AB) Subject to subsection (1AC) below, the conditions in paragraphs (aa) and (a) of subsection (1) above shall be treated as satisfied in relation to a loan (“*the new loan*”) if—
- (a) the new loan was made on or after the day on which the Finance Act 1999 was passed;
- (b) the new loan was made as part of a scheme (“*the scheme*”) under which the whole or any part of the proceeds of the loan was used to defray money applied in paying off another loan (“*the old loan*”); and
- (c) the conditions in subsection (1) above were, or were treated by virtue of this subsection as, satisfied with respect to the old loan.
- (1AC) If only part of the proceeds of the new loan was used to defray money applied in paying off the old loan, subsection (1AB) above applies only if, under the scheme, not less than nine-tenths of the remaining part of the proceeds of the new loan was applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons who include him.
- (1AD) In subsection (1AC) above “*the remaining part*” means the part of the proceeds of the new loan that was not used to defray money applied in paying off the old loan.
- (1A) The condition in subsection (1)(d) above shall be treated as satisfied in relation to a loan if—
- (a) the person to whom the loan was made, or any of the annuitants, ceased to use the land as his only or main residence at a time falling within the period of twelve months ending with 8th March 1999, and
- (b) the intention at that time of the person to whom the loan was made, or each of the annuitants owning an estate or interest in the land, was to take steps, before the end of the period of twelve months after the day on which the land ceased to be so used, with a view to the disposal of his estate or interest.
- (1B) If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case subsection (1A) above shall have effect as if for the reference to 12 months there were substituted a reference to such longer period as meets the circumstances of that case.
- (2) Interest is not eligible for relief by virtue of this section unless it is payable by the person to whom the loan was made or by one of the annuitants.
- (3) If the loan was made after 26th March 1974 interest on it is eligible for relief by virtue of this section only to the extent that the amount on which it is payable does not exceed the sum of £30,000; and if the interest is payable by two or more persons the interest payable by each of them is so eligible only to the extent that the amount on which it is payable does not exceed such amount as bears to that sum the same proportion as the interest payable by him bears to the interest payable by both or all of them.
#### Information
##### 366
- (1) A person who claims relief under section 353 in respect of any payment of interest shall furnish to the inspector a statement in writing by the person to whom the payment is made, showing—
- (a) the date when the debt was incurred;
- (b) the amount of the debt when incurred;
- (c) the interest paid in the year of assessment for which the claim is made . . . ; and
- (d) the name and address of the debtor.
- (2) Where any such interest as is mentioned in section 353 is paid, the person to whom it is paid shall, if the person who pays it so requests in writing, furnish him with such statement as regards that interest as is mentioned in subsection (1) above; and the duty imposed by this subsection shall be enforceable at the suit or instance of the person making the request.
- (3) Subsections (1) and (2) above do not apply to interest paid to a building society, or to a local authority.
#### Provisions supplementary to sections 354 to 366
##### 367
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In section 365(3) references to the qualifying maximum for the year of assessment are references to such sum as Parliament may determine for the purpose for that year.
#### Exclusion of double relief etc
##### 368
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Mortgage interest relief at source
#### Mortgage interest payable under deduction of tax
##### 369
- (1) If a person who is a qualifying borrower makes a payment of relevant loan interest to which this section applies, he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to the applicable percentage thereof.
- (1A) In subsection (1) above “*the applicable percentage*” means 23 per cent..
- (2) Where a sum is deducted under subsection (1) above from a payment of relevant loan interest—
- (a) the person to whom the payment is made shall allow the deduction on receipt of the residue;
- (b) the borrower shall be acquitted and discharged of so much money as is represented by the deduction as if the sum had been actually paid; and
- (c) the sum deducted shall be treated as income tax paid by the person to whom the payment is made.
- (3) The following payments, that is to say—
- (a) payments of relevant loan interest to which this section applies, and
- (b) payments which would be such payments but for section 373(5),
shall not be allowable as deductions for any purpose of the Income Tax Acts except in so far as they fall to be treated as such payments by virtue only of section 375(2) and would be allowable apart from this subsection.
- (6) Sections 967(2) and 968(2) of CTA 2010 do not apply to a payment of relevant loan interest to which this section applies, but any person by whom such a payment is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (2)(c) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the payment of relevant loan interest to which it relates.
- (7) The following provisions of the Management Act, namely—
- (a) section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act;
- (b) section 30 (tax repaid in error etc.) apart from subsection (1B),
- (c) section 86 (interest), and
- (d) section 95 (incorrect return or accounts),
shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due.
- (8) In the application of section 86 of the Management Act by virtue of subsection (7) above in relation to sums due and payable by virtue of an assessment made for the whole or part of a year of assessment (“the relevant year of assessment”) under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date—
- (a) is 1st January in the relevant year of assessment in a case where the person falling within subsection (6) above has made a relevant interim claim; and
- (b) in any other case, is the later of the following dates, that is to say—
- (i) 1st January in the relevant year of assessment; or
- (ii) the date of the making of the payment by the Board which gives rise to the assessment.
- (9) In this section—
- “*financial year*”, in relation to any person, means a financial year of that person for the purposes of the relevant regulations;
- “*interim claim*” means an interim claim within the meaning of the relevant regulations;
- “*relevant interim claim*” means, in relation to an assessment made for a period coterminous with, or falling wholly within, a person’s financial year, an interim claim made for a period falling wholly or partly within that financial year; and
- “*the relevant regulations*” means regulations made under section 378(3) for the purposes of subsection (6) above.
#### Relevant loan interest
##### 370
- (1) Subject to this section and sections 373 to 376, in this Part “*relevant loan interest*” means interest which is paid and payable in the United Kingdom to a qualifying lender and to which subsection (2) . . . below applies.
- (2) Subject to subsection (4) below, this subsection applies to interest if, disregarding section 353(2) and any other provision applying to interest falling to be treated as relevant loan interest—
- (a) it is interest falling within section . . . 365; and
- (b) apart (where applicable) from section . . . 365(3), the whole of the interest would be eligible for relief under section 353;. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In determining whether subsection (2) above applies to any interest, section 365 shall have effect as if the words “or the Republic of Ireland” were omitted.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Second loans
##### 371
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Home improvement loans
##### 372
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans in excess of the qualifying maximum, and joint borrowers
##### 373
- (1) The provisions of this section have effect in relation to a loan where, by virtue of . . . section 365(3), only part of the interest on the loan would (apart from section 353(2)) be eligible for relief under section 353; and in this section any such loan is referred to as a “*limited loan*”.
- (2) None of the interest on a limited loan is relevant loan interest unless—
- (a) the loan is made on or after 6th April 1987; or
- (b) the qualifying lender to whom the interest is payable has given notice to the Board in accordance with regulations that he is prepared to have limited loans of a description which includes that limited loan brought within the tax deduction scheme.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Where the condition in paragraph (a) or (b) of subsection (2) above is fulfilled . . . only so much of the interest as (apart from section 353(2)) would be eligible for relief under section 353 is relevant loan interest.
- (6) Where a loan on which interest is payable by the borrower was made jointly to the borrower and another person who is not the borrower’s husband or wife, the interest on the loan is not relevant loan interest unless—
- (a) each of the persons to whom the loan was made is a qualifying borrower; and
- (b) in relation to each of them considered separately, the whole of that interest is relevant loan interest, in accordance with section 370 and this section.
- (7) In subsection (6) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
#### Conditions for application of section 369
##### 374
- (1) Section 369 does not apply to any relevant loan interest unless—
- (a) in the case of a loan of a description specified by regulations for the purposes of this paragraph, the borrower or, in the case of joint borrowers, each of them has given notice to the lender in the prescribed form certifying—
- (i) that he is a qualifying borrower; and
- (ii) that the interest is relevant loan interest; and
- (iii) such other matters as may be prescribed; or
- (b) the Board have given notice to the lender and the borrower that the interest may be paid under deduction of tax; or
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) the loan to which the interest relates is of a description specified by regulations for the purposes of this paragraph and was made—
- (i) if sub-paragraph (2) of paragraph 2 of Schedule 7 to the Finance Act 1982 applied to interest on the loan which became due on or after a date earlier than 6th April 1983, being a date specified by the Board in pursuance of sub-paragraph (5) of that paragraph, before that earlier date; or
- (ii) if the qualifying lender is a building society or a local authority, before 1st April 1983; or
- (iii) if sub-paragraphs (i) and (ii) above do not apply and the interest falls within section 370(2), before 6th April 1983.
- (2) Where notice has been given as mentioned in paragraph (a) or (b) of subsection (1) above, section 369 applies to any relevant loan interest to which the notice relates and which becomes due on or after the relevant date, as defined by subsection (3) below; and in a case falling within paragraph . . . (d) of subsection (1) above, section 369 applies to the relevant loan interest referred to in that paragraph.
- (3) In subsection (2) above “*the relevant date*” means—
- (a) in the case of a notice under subsection (1)(a) above, the date the notice is given, and
- (b) in the case of a notice under subsection (1)(b) above, a date specified in the notice as being the relevant date (which may be earlier than the date so specified as the date from which the interest may be paid under deduction of tax).
#### Interest ceasing to be relevant loan interest, etc
##### 375
- (1) If at any time—
- (a) the interest on a loan ceases to be relevant loan interest; or
- (b) a person making payments of relevant loan interest ceases to be a qualifying borrower;
the borrower shall give notice of the fact to the lender.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) which is due after the time referred to in subsection (1) above and before the date on which notice is given under that subsection, and
- (aa) as respects which any of the conditions mentioned in section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to any deduction or to retain any amount deducted and, accordingly, where any amount that has been deducted exceeds the amount which ought to have been deducted, he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made.
- (4A) If there is any unreasonable delay in the giving of a notice under subsection (1) above, the borrower shall be liable to a penalty not exceeding so much of the aggregate amount that he is liable to make good under subsection (3) above as is attributable to that delay.
- (5) If, as a result of receiving a notice under subsection (1) above or otherwise, a qualifying lender has reason to believe that any interest is no longer relevant loan interest or that a borrower is no longer a qualifying borrower, the lender shall furnish the Board with such information as is in his possession with respect to those matters.
- (6) Where it appears to the Board that any of the provisions of sections 370 to 373 is not or may not be fulfilled with respect to any interest, or that a qualifying borrower has or may have ceased to be a qualifying borrower, they shall give notice of that fact to the lender and the borrower specifying the description of relevant loan interest concerned or, as the case may be, that the borrower has or may have ceased to be a qualifying borrower.
- (7) Section 369 shall not apply to any payment of relevant loan interest of a description to which a notice under subsection (6) above relates and which becomes due or is made after such date as may be specified in the notice and before such date as may be specified in a further notice given by the Board to the lender and the borrower.
- (8) In any case where—
- (a) section 369 applies to any relevant loan interest by virtue of a notice under section 374(1)(b), and
- (b) the relevant date specified in the notice is earlier than the date from which the interest begins to be paid under deduction of tax, and
- (c) a payment of that interest was made on or after the relevant date but not under deduction of tax,
regulations may provide for a sum to be paid by the Board of an amount equal to that which the borrower would have been able to deduct from that payment by virtue of section 369 if it had been made after the relevant date.
- (8A) In any case where an amount to which a person is not entitled is paid to him by the Board in pursuance of regulations made by virtue of subsection (8) above, regulations may—
- (a) provide for an officer of the Board to make such assessments as may in his judgment be required for recovering that amount from that person; and
- (b) make provision corresponding to that made by subsection (4A) above and subsections (4) and (5) of section 374A.
- (8B) Subsections (1), (5) and (6) above shall not apply where interest ceases to be relevant loan interest by virtue of section 38 of the Finance Act 1999.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying borrowers and qualifying lenders
##### 376
- (1) Subject to subsection (2) below, an individual is a qualifying borrower with respect to the interest on any loan.
- (2) In relation to interest paid at a time when the borrower or the borrower’s husband or wife holds an office or employment which would, but for some special exemption or immunity from tax, be a taxable employment under Part 2 of ITEPA 2003 (as defined by section 66(3) of that Act), the borrower is not a qualifying borrower.
- (3) In subsection (2) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
- (4) The following bodies are qualifying lenders:—
- (a) a building society;
- (b) a local authority;
- (c) the Bank of England;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of long-term insurance;
- (f) any company to which property and rights belonging to a trustee savings bank were transferred by section 3 of the Trustee Savings Bank Act 1985;
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (h) a development corporation within the meaning of the New Towns Act 1981 or the New Towns (Scotland) Act 1968;
- (j) the Homes and Communities Agency;
- (k) the Regulator of Social Housing,
- (ka) the Secretary of State if the loan is made by him under section 79 of the Housing Associations Act 1985;
- (l) the Northern Ireland Housing Executive;
- (m) the Scottish Special Housing Association;
- (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (o) the Church of England Pensions Board;
- (p) any body which is for the time being registered under section 376A.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Variation of terms of repayment of certain loans
##### 377
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary regulations
##### 378
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The Board may by regulations make provision—
- (a) for the purposes of any provision of sections 369 to 376A which relates to any matter or thing to be specified by or done in accordance with regulations;
- (b) for the application of those sections in relation to loan interest paid by personal representatives and trustees;
- (c) with respect to the furnishing of information by borrowers or lenders, including, in the case of lenders, the inspection of books, documents and other records on behalf of the Board;
- (d) for, and with respect to, appeals to the tribunal against the refusal of the Board to issue a notice under section 374(1)(b) or the issue of a notice under section 375(6) or (7); and
- (e) generally for giving effect to sections 369 to 376A.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of sections 369 to 378
##### 379
In sections 369 to 378—
- “contracts of general insurance” means contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contracts of long-term insurance” means contracts which fall within Part II of that Schedule;
- “*prescribed*” . . . means prescribed by the Board;
- “*qualifying borrower*” has the meaning given by section 376(1) to (3);
- “*qualifying lender*” has the meaning given by section 376(4) . . . ;
- “*regulations*” . . . means regulations made by the Board under section 378;
- “*relevant loan interest*” has the meaning given by section 370(1);
- “*separated*” means separated under an order of a court of competent jurisdiction or by deed of separation or in such circumstances that the separation is likely to be permanent.
## PART X — LOSS RELIEF AND GROUP RELIEF
### CHAPTER I — LOSS RELIEF: INCOME TAX
### Trade etc. losses
#### Set-off against general income
##### 380
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further relief for individuals for losses in early years of trade
##### 381
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 380 and 381
##### 382
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Extension of right of set-off to capital allowances
##### 383
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restrictions on right of set-off
##### 384
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward against subsequent profits
##### 385
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward where business transferred to a company
##### 386
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward as losses of amounts taxed under section 350
##### 387
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-back of terminal losses
##### 388
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions relating to carry-back of terminal losses
##### 389
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of interest as a loss for purposes of carry-forward and carry-back
##### 390
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses from trade etc. carried on abroad
##### 391
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Case VI losses
#### Case VI losses
##### 392
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — LOSS RELIEF: CORPORATION TAX
### Trade etc. losses
#### Losses other than terminal losses
##### 393
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Terminal losses
##### 394
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Leasing contracts and company reconstructions
##### 395
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Case VI losses
#### Case VI losses
##### 396
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — LOSS RELIEF: MISCELLANEOUS PROVISIONS
#### Restriction of relief in case of farming and market gardening
##### 397
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions in deposits with and without certificates or in debts
##### 398
Where a company sustains a loss on the exercise or disposal of a right to receive any amount, being a right to which section 56(2) . . . applies, in a case where—
- (a) if a profit had arisen from that exercise or disposal, that profit would have been chargeable to corporation tax by virtue of section 56(2) . . . , and
- (b) the company is chargeable to corporation tax under Part 5 of CTA 2009 (loan relationships) in respect of interest payable on that amount,
then the amount of that interest shall be included in the amounts against which the amount of its loss may be set off under section 91 of CTA 2010.
#### Dealings in commodity futures etc: withdrawal of loss relief
##### 399
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Write-off of government investment
##### 400
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for pre-trading expenditure
##### 401
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — GROUP RELIEF
#### Surrender of relief between members of groups and consortia
##### 402
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses etc. which may be surrendered by way of group relief
##### 403
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limitation of group relief in relation to certain dual resident companies
##### 404
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims relating to losses etc. of members of both group and consortium
##### 405
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims relating to losses etc. of consortium company or group member
##### 406
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relationship between group relief and other relief
##### 407
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Corresponding accounting periods
##### 408
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies joining or leaving group or consortium
##### 409
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Arrangements for transfer of company to another group or consortium
##### 410
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exclusion of double allowances
##### 411
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims and adjustments
##### 412
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter IV
##### 413
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XI — CLOSE COMPANIES
### CHAPTER I — INTERPRETATIVE PROVISIONS
#### Close companies
##### 414
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Certain quoted companies not to be close companies
##### 415
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “associated company” and “control”
##### 416
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “participator”, “associate”, “director” and “loan creditor”
##### 417
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Additional matters to be treated as distributions
#### “Distribution” to include certain expenses of close companies
##### 418
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — CHARGES TO TAX IN CONNECTION WITH LOANS
#### Loans to participators etc
##### 419
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from section 419
##### 420
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of borrower when loan under section 419 released etc
##### 421
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Extension of section 419 to loans by companies controlled by close companies
##### 422
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — APPORTIONMENT OF UNDISTRIBUTED INCOME ETC.
#### Apportionment of certain income, deductions and interest
##### 423
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exclusions from section 423
##### 424
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Manner of apportionment
##### 425
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to income tax where apportionment is to an individual
##### 426
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction of charge under section 426 in certain cases
##### 427
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Increase of apportioned sum etc. by reference to ACT
##### 428
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payment and collection of income tax
##### 429
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consequences of apportionment: ACT
##### 430
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XII — SPECIAL CLASSES OF COMPANIES AND BUSINESSES
### CHAPTER I — INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS
### Insurance companies: general
#### Interpretative provisions relating to insurance companies
##### 431
- (1) This section has effect for the interpretation of the life assurance provisions of the Corporation Tax Acts.
- (2) Unless the context otherwise requires—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*basic life assurance and general annuity business*” has the meaning given by section 431F;
- “*brought into account*” has the meaning given by section 83A of the Finance Act 1989;
- “*child trust fund business*” has the meaning given by section 431BA;
- “*closing*” and “*opening*”, in relation to a period of account, refer respectively to the position at the end and at the beginning of the period and, in relation to an accounting period, refer respectively to the position at the end and at the beginning of the period of account in which the accounting period falls;
- “*closing liabilities*” includes liabilities assumed at the end of the period of account concerned in consequence of the declaration of reversionary bonuses or a reduction in premiums;
- “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contract of long-term insurance” means any contract which falls within Part II of Schedule 1 to that Order;
- “*deposit back arrangements*” means arrangements by which an amount is deposited by the reinsurer under a contract of reinsurance with the cedant;
- “*fair value*”, in relation to assets, means the amount which would be obtained from an independent person purchasing them or, if the assets are money, its amount;
- “*foreign business assets*”, in relation to an insurance company, means assets, other than linked assets, which either—are shown in the records of the company as being primarily attributable to liabilities of the company's foreign business, orare attributable, under the law of a country or territory outside the United Kingdom, to a permanent establishment of the company in that country or territory through which it carries on foreign business;and for this purpose “*foreign business*” means overseas life assurance business or life reinsurance business to the extent that it consists of the reinsurance of overseas life assurance business;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*free assets amount*”, in relation to an insurance company, means the excess of the value of the assets of the company's long-term business , other than any structural assets (within the meaning of section 83XA of the Finance Act 1989), over the aggregate of —the value of the liabilities of that business,any money debts (within the meaning of Part 5 of CTA 2009 (see section 303 of that Act)) of the company not within paragraph (a) above which are owed in respect of that business, andthe amount of the shareholders' excess assets within the meaning given by section 432A(8)(b));
- “*General Prudential Sourcebook*” means the General Prudential Sourcebook made by the Financial Services Authority under the Financial Services and Markets Act 2000 ;
- “*gross roll-up business*” has the meaning given by section 431EA;
- “*the I minus E basis*” means the basis under which a company carrying on life assurance business is charged to tax on the relevant profits (within the meaning of section 88(3) of the Finance Act 1989) of that business otherwise than under section 35 of CTA 2009 (charge on trade profits);
- “*immediate needs annuities business*” means business which consists of the effecting or carrying out of immediate needs annuities (within the meaning of section 725 of ITTOIA 2005);
- “*individual savings account business*” has the meaning given by section 431BB;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*insurance business transfer scheme*” means—a scheme falling within section 105 of the Financial Services and Markets Act 2000, including an excluded scheme falling within Case 2, 3 , 4 or 5 of subsection (3) of that section, ora scheme which would fall within that section but for subsection (1)(b) of that section;
- “insurance company” means—a person (other than a friendly society) who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, oran EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act or a firm qualifying for authorisation under Schedule 4 to that Act which—carries on business which consists of the effecting or carrying out of contracts of insurance, andcarries on that business through a branch or agency in the United Kingdom,but does not include an insurance special purpose vehicle;
- “*the Insurance Prudential Sourcebook*” means the Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- “*insurance special purpose vehicle*” means any undertaking which assumes risks from insurance or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issue or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the reinsurance obligations of the undertaking;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*internal linked fund*”, in relation to an insurance company, means an account—to which linked assets are appropriated by the company, andwhich may be divided into units the value of which is determined by the company by reference to the value of those assets;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*liabilities*”, in relation to an insurance company, means—the mathematical reserves of the company as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook, andliabilities of the company (whose value falls to be determined in accordance with section 1.3 of the General Prudential Sourcebook) which arise from deposit back arrangements;. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*life assurance business*” means business which—consists of the effecting or carrying out of contracts of insurance which fall within paragraph I, II, III or VII(b) of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, oris capital redemption business,other than immediate needs annuities business;
- “*the life assurance provisions of the Corporation Tax Acts*” means—the provisions of this Chapter so far as relating to life assurance business, companies carrying on such business and friendly societies, andany other provisions of the Corporation Tax Acts making separate provision by reference to whether or not the business of a company is or includes life assurance business or any category of business that includes life assurance business;
- “*life assurance trade profits provisions*” means the provisions applicable for the purposes of the taxation under section 35 of CTA 2009 (charge on trade profits) of the profits of life assurance business carried on by an insurance company;
- “*life reinsurance business*” has the meaning given by section 431C;
- “*linked assets*”, and related expressions, shall be construed in accordance with section 432ZA;
- “long-term business” means business which consists of the effecting or carrying out of contracts of long-term insurance;
- “*long-term insurance fund*” means the fund maintained by an insurance company in respect of its long-term business . . . ;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*net value*”, in relation to any assets, means the excess of the value of the assets over the value of money debts (within the meaning of Part 5 of CTA 2009: see section 303 of that Act) attributable to an internal linked fund which are not owed in respect of liabilities;
- “*non-profit company*”, in relation to a period of account, means a company carrying on long-term business where, at the end of the period—none of the liabilities of that business, ornone but an insignificant proportion of those liabilities,are with-profits liabilities;
- “*non-profit fund*” means a fund that is not a with-profits fund;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*overseas life assurance business*” has the meaning given by section 431D;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*overseas life insurance company*” means an insurance company not resident in the United Kingdom but carrying on life assurance business through a branch or agency in the United Kingdom; . . .
- “*pension business*” has the meaning given by section 431B;
- “*periodical return*”, in relation to an insurance company, means a return deposited with the Financial Services Authority under section 9.6 of the Prudential Sourcebook (Insurers)(and does not include the Forms mentioned in Rule 9.3(5)).
- “*period of account*” means the period covered by a periodical return;
- “*PHI business*” means long-term business other than life assurance business (including the reinsurance of such long-term business);
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “the Prudential Sourcebook (Insurers)” means the Interim Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- “*reinsurance*” includes retrocession;
- “*shareholders' excess assets*” has the meaning given by section 432A(8)(b));
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*value*”, in relation to an asset of an insurance company, means the value of the asset as determined in accordance with section 1.3 of the General Prudential Sourcebook, as read with section 2.1 of the Insurance Prudential Sourcebook;
- “*with-profits fund*” has the meaning given by the Prudential Sourcebook (Insurers);
- “*with-profits liabilities*” means liabilities in respect of policies or contracts under which the policy holders or annuitants are eligible to participate in surplus;
- (2YA) Where an insurance company becomes an insurance special purpose vehicle otherwise than on the last day of a period of account, it shall be treated as an insurance special purpose vehicle from the beginning of that period.
- (2YB) “*BLAGAB profits*”, in relation to an accounting period of an insurance company, means the company's BLAGAB income and gains for the period reduced (but not below nil) by the company's BLAGAB deductions for the period.
- (2YC) “*BLAGAB income and gains*”, in relation to an accounting period of an insurance company, means the aggregate of—
- (a) income chargeable for the period . . . so far as referable (in accordance with section 432A) to the company's basic life assurance and general annuity business, and
- (b) chargeable gains so far as so referable accruing to the company in the period, but (subject to section 210A of the 1992 Act) after deducting—
- (i) any allowable losses so referable and so accruing, and
- (ii) so far as they have not been allowed as a deduction from chargeable gains in any previous accounting period, any allowable losses so referable previously accruing to the company.
- (2YD) “*BLAGAB deductions*”, in relation to an accounting period of an insurance company, means the aggregate of—
- (a) amounts falling in respect of any non-trading deficits on the company's loan relationships to be brought into account in the period in accordance with sections 387 to 391 of CTA 2009, and
- (b) the expenses deduction given by Step 8 in section 76(7) for the period.
- (2ZA) Subsections (2ZB) and (2ZC) below apply where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2ZB) If the transfer takes place otherwise than on the last day of a period of account of the transferor, references to—
- (a) opening liabilities of the transferor,
- (b) opening values or net values of assets of the transferor, . . . or
- (c) the opening amount of the free assets amount of the transferor, . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion A/C.
- (2ZC) If the transfer takes place otherwise than on the first day of a period of account of the transferee, references to—
- (a) closing liabilities of the transferee,
- (b) closing values or net values of assets of the transferee, . . . or
- (c) the closing amount of the free assets amount of the transferee, . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion B/C.
- (2ZD) For the purposes of subsection (2ZC) above—
- (a) closing liabilities of the transferee are to be taken not to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferor with the transferee, but
- (b) closing liabilities of the transferee are to be taken to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferee with the transferor if the business transferred consists of or includes that reinsurance business.
- (2ZE) In subsections (2ZB) and (2ZC) above—
- A is the number of days in the period beginning with the period of account and ending with the day of the transfer,
- B is the number of days in the period beginning with the day of the transfer and ending with the period of account, and
- C is one-half of the number of days in the period of account.
- (2ZF) In this Chapter “*capital redemption business*” means any business of a company carrying on insurance business in so far as it consists of the effecting on the basis of actuarial calculations, and the carrying out, of contracts under which, in return for one or more fixed payments, a sum or series of sums of a specified amount become payable at a future time or over a period.
- (2ZG) The Treasury may by order amend the definition of “insurance business transfer scheme” given by subsection (2) above where it is expedient to do so in consequence of any amendment of section 105 of the Financial Services and Markets Act 2000.
- (2ZH) The power conferred by subsection (2ZG) above includes power to make incidental, supplementary, consequential or transitional provisions and savings (including provision amending any provision of the Corporation Tax Acts relating to insurance companies).
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Separation of different classes of business
##### 432
- (1) Where an insurance company carries on life assurance business in conjunction with insurance business of any other category, the life assurance business shall, for the purposes of the Corporation Tax Acts, be treated as a separate business from any other category of business carried on by the company.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Profits reserved for policy holders and annuitants
##### 433
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Franked investment income etc
##### 434
- (1) Where an insurance company makes a payment representative of a distribution made by a company resident in the United Kingdom in respect of an asset of its long-term insurance fund, the payment is to be taken into account in computing its profits in accordance with the life assurance trade profits provisions unless the amount taken into account in accordance with section 83(2)(a) of the Finance Act 1989 includes the amount of the payment.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) So much of the policy holders' share of the franked investment income from investments of a company’s long-term insurance fund as is referable to its life assurance business shall be left out of account in determining, under section 32(1) of CTA 2010 (which relates to relief for small companies), the franked investment income forming part of the company’s profits for the purposes of Part 3 of that Act.
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) *Subject to subsection* (5)*below, the specified part shall be, in the case of any unrelieved income, the same fraction of it as the fraction which, on a computation of the profits of the company in respect of its life assurance business in accordance with the provisions applicable to Case* I*of Schedule D* (*whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods*),*would be connoted by the words in section* 433 “*such part of those profits as belongs or is allocated to, or is reserved for, or expended on behalf of, policy holders or annuitants*”.
- (5) *If the income exceeds the profits as computed in accordance with the provisions applicable to Case* I*of Schedule D other than section 433, the specified part shall be that fraction of the income so far as not exceeding the profits, together with the amount of the excess*.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) For the purposes of this section—
- (a) “*the policy holders’ share*” of any franked investment income is so much of that income as is not the shareholders’ share within the meaning of section 89 of the Finance Act 1989, . . .
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ab) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ac) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of gains reserved for policy holders and annuitants
##### 435
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Annuity business and pension business: separate charge on profits
##### 436
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### General annuity business
##### 437
- (1A) In the computation under the I minus E basis of the relevant profits (within the meaning of section 88(1) of the Finance Act 1989) of an insurance company for any accounting period, new annuities paid by the company in that period shall be brought into account by treating an amount equal to the income limit for that period as expenses payable which fall to be brought into account for that period at Step 3 in section 76(7).
- (1C) For the purposes of this section (but subject to subsections (1CA) to (1CD) below)—
- (a) “*new annuity*” means any annuity, so far as paid under a contract made by an insurance company in an accounting period beginning on or after 1st January 1992 and so far as referable to the company’s basic life assurance and general annuity business;
- (b) “*the income limit*” for an accounting period of an insurance company is the difference between—
- (i) the total amount of the new annuities paid by the company in that accounting period; and
- (ii) the total of the . . . amounts exempt under section 717 of ITTOIA 2005 contained in the new annuities so paid; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .and
- (d) the amounts exempt under section 717 of ITTOIA 2005 are so much of the payments under the new annuities as would be within the exemption in subsection (1) of that section if—
- (i) section 718 of that Act were omitted, and
- (ii) that exemption were an exemption applying in relation to companies as well as individuals.
- (1CA) Where a new annuity (“*the actual annuity*”) is a steep-reduction annuity, the income limit for an accounting period of the company paying the annuity shall be computed for the purposes of this section as if—
- (a) the contract providing for the actual annuity provided instead for the annuities identified by subsections (1CB) and (1CC) below; and
- (b) the consideration for each of those annuities were to be determined by the making of a just and reasonable apportionment of the consideration for the actual annuity.
- (1CB) The annuities mentioned in subsection (1CA)(a) above are—
- (a) an annuity the payments in respect of which are confined to the payments in respect of the actual annuity that fall to be made before the earliest time for the making in respect of the actual annuity of a reduced payment such as is mentioned in section 437A(1)(c); and
- (b) subject to subsection (1CC) below, an annuity the payments in respect of which are all the payments in respect of the actual annuity other than those mentioned in paragraph (a) above.
- (1CC) Where an annuity identified by paragraph (b) of subsection (1CB) above (“*the later annuity*”) would itself be a steep-reduction annuity, the annuities mentioned in subsection (1CA)(a) above—
- (a) shall not include the later annuity; but
- (b) shall include, instead, the annuities which would be identified by subsection (1CB) above (with as many further applications of this subsection as may be necessary for securing that none of the annuities mentioned in subsection (1CA)(a) above is a steep-reduction annuity) if references in that subsection to the actual annuity were references to the later annuity.
- (1CD) Subsections (1CA) to (1CC) above shall be construed in accordance with section 437A.
- (1D) In any case where—
- (a) a payment in respect of an annuity is made by an insurance company under a group annuity contract made in an accounting period beginning before 1st January 1992,
- (b) the company’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the company’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall be treated for the purposes of this section, other than this subsection, as if the group annuity contract had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1E) In any case where—
- (a) a payment in respect of an annuity is made by a reinsurer under a reinsurance treaty made in an accounting period beginning before 1st January 1992,
- (b) the reinsurer’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the reinsurer’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall, as respects the reinsurer, be treated for the purposes of this section, other than this subsection, as if the reinsurance treaty had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1F) In this section—
- “*group annuity contract*” means a contract between an insurance company and some other person under which the company undertakes to become liable to pay annuities to or in respect of such persons as may subsequently be specified or otherwise ascertained under or in accordance with the contract (whether or not annuities under the contract are also payable to or in respect of persons who are specified or ascertained at the time the contract is made);
- “*reinsurance treaty*” means a contract under which one insurance company is obliged to cede, and another (in this section referred to as a “*reinsurer*”) to accept, the whole or part of a risk of a class or description to which the contract relates.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Pension business: exemption from tax
##### 438
- (1) Exemption from corporation tax shall be allowed in respect of income from assets solely linked to pension business.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restricted government securities
##### 439
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Identification or exchange of long term assets
##### 440
- (1) If at any time an asset (or a part of an asset) held by an insurance company ceases to be within one of the categories set out in subsection (4) below and comes within another of those categories, the company shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) for a consideration equal to its fair value at that time.
- (2) Where—
- (a) a person entitled to an allowance under subsection (1) above is a person whose spouse or civil partner is living with him for the whole of any part of the year of assessment, but
- (b) the amount to which the person is entitled exceeds the person's remaining relievable income,
his spouse or civil partner shall be entitled to an allowance of an amount equal to the excess.
- (2A) The person's remaining relievable income is the amount found by—
- (a) taking the amount of the individual's net income, and
- (b) subtracting any personal allowance to which the person is entitled.
- (a) an asset is acquired by a company as a result of an insurance business transfer scheme which has effect to transfer long-term business from any person (“the transferor”) to the company, and
- (b) the asset (or part of it) is within one of the categories set out in subsection (4) below immediately before the acquisition and is within another of those categories immediately afterwards,
the transferor shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) immediately before the acquisition for a consideration equal to its fair value at that time.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where, apart from this subsection, section 171 or 173 the 1992 Act (transfers within a group) would apply to a disposal or acquisition by an insurance company of an asset (or part of an asset) which, immediately before the disposal or (as the case may be) immediately after the acquisition, is within one of the categories set out in paragraphs (a), (d) and (e) of subsection (4) below, that section shall not apply to the disposal or acquisition.
- (4) The categories referred to in subsections (1) to (3) above are—
- (a) assets which are linked solely to gross roll-up business or are foreign business assets;
- (d) assets linked solely to basic life assurance and general annuity business;
- (e) assets of the long-term insurance fund not within either of the preceding paragraphs;
- (f) other assets.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) In a case where the profits of a company’s life assurance business are charged to tax under section 35 of CTA 2009 (charge on trade profits) this section has effect with the modification specified in section 440B(3).
#### Foreign life assurance funds
##### 441
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Overseas business of U.K. companies
##### 442
- (1) Subsections (2) and (3) below apply where a company resident in the United Kingdom carries on insurance business outside the United Kingdom through a permanent establishment and—
- (a) that business, or part of it, together with the whole assets of the company used for the purposes of that business or part (or together with the whole of those assets other than cash), is transferred to a company not resident in the United Kingdom;
- (b) the business or part is so transferred wholly or partly in exchange for shares, or for shares and loan stock, issued by the transferee company to the transferor company; and
- (c) the shares so issued, either alone or taken together with any other shares in the transferee company already held by the transferor company, amount in all to not less than one quarter of the ordinary share capital of the transferee company.
- (2) In making any computation in accordance with the provisions applicable for the purposes of section 35 of CTA 2009 (charge on trade profits) of the profits or losses of the transferor company for the accounting period in which the transfer occurs, there shall be disregarded any profit or loss in respect of any asset transferred which, apart from this subsection, would fall to be taken into account in making that computation.
- (3) Where by virtue of subsection (2) above any profit or loss is disregarded in making any computation . . . the profit or loss shall be treated for the purposes of the 1992 Act as a chargeable gain or allowable loss accruing to the transferor company on the transfer.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life policies carrying rights not in money
##### 443
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life policies issued before 5th August 1965
##### 444
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Provisions applying only to overseas life insurance companies
#### Charge to tax on investment income
##### 445
#### Annuity business
##### 446
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Subsection (2) above shall not apply for a year of assessment unless the person entitled to an allowance under subsection (1) has given to the inspector written notice that it is to apply; and any such notice—
- (a) shall be given not more than 4 years after the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
- (6) A notice given under subsection (5) above in relation to a year of assessment by a spouse or civil partner shall have effect also as a notice under section 257BB(2).
- (7) In this section “*registered blind person*” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act.
- (8) An allowance under this section is given effect at Step 3 of the calculation in section 23 of ITA 2007.
#### Life assurance premiums
##### 266
- (1) Subject to the provisions of this section, section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004, an eligible individual who pays any such premium as is specified in subsection (2) below . . . shall (without making any claim) be entitled to relief under this section.
- (1A) For the purposes of subsection (1) above an individual is an eligible individual if the individual—
- (a) is resident in the United Kingdom, or
- (b) meets the conditions in section 56(3) of ITA 2007.
- (2) The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where—
- (a) the payments are made to —
- (i) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or
- (ii) a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000;
- (iv) in the case of a deferred annuity, the National Debt Commissioners; and
- (b) the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse or civil partner; and
- (c) the insurance or contract was made by him or his spouse or civil partner.
- (3) Subject to subsections . . . (10) and (11) below, no relief under this section shall be given—
- (a) except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not;
- (b) in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy;
- (c) in respect of premiums payable under any policy issued in respect of an insurance made after 13th March 1984 . . . ;
- (d) in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance.
- (4) Subject to subsection (8) below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year.
- (5) Subject to the provisions of Schedule 14—
- (a) an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to 12.5 per cent of the payment; and
- (b) the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) Where the individual is not resident in the United Kingdom (but is entitled to relief by virtue of subsection (1A)(b)), subsection (4) above shall not apply but . . . the like relief shall be given to him under paragraph 6 of Schedule 14.
- (9) Subsections (5) and (8) above shall apply in relation to an individual who is not resident in the United Kingdom but is a member of the armed forces of the Crown or the spouseor civil partner of such a member as if the individual were so resident.
- (10) Subsection (3)(b) above shall not apply—
- (a) to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or
- (b) to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV.
- (11) Subsection (3)(a) and (d) above shall not affect premiums payable—
- (a) under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the spouse, civil partner, widow, widower , surviving civil partner or children or other dependants of any such employee or person, or
- (b) under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers.
- (12) Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section.
- (13) In . . . Schedule 14, “*friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act).
- (14) In subsection (2)(a)—
- “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and
- “member of the society” has the same meaning as in Lloyd’s Act 1982 .
#### Qualifying policies
##### 267
Schedule 15, Part I of which contains the basic rules for determining whether or not a policy is a qualifying policy, Part II of which makes provision for the certification etc. of policies as qualifying policies and Part III of which modifies Parts I and II in their application to certain policies issued by non-resident companies, shall have effect for the purpose of determining whether or not a policy is a qualifying policy; and, accordingly, any reference in this Act to a qualifying policy shall be construed in accordance with that Schedule.
#### Early conversion or surrender of life policies
##### 268
- (1) Where a policy of life insurance to which this section applies has been issued and, within four years from the making of the insurance in respect of which it was issued, any of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy;
- (b) the falling due (otherwise than on death) of a sum payable in pursuance of a right conferred by the policy to participate in profits; and
- (c) the conversion of the policy into a paid-up or partly paid-up policy;
the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender or, as the case may be, out of the sum falling due or out of the fund available to pay the sums which will be due on death or on the maturity of the policy, a sum determined in accordance with the following provisions of this section, unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the lower of the following, that is to say—
- (a) the appropriate percentage of the premiums payable under the policy up to the happening of the event; and
- (b) the surrender value of the policy at the time of the happening of the event less the complementary percentage of the premiums mentioned in paragraph (a) above.
- (3) If the event is one of those mentioned below, the sum payable to the Board shall not exceed the following limit, that is to say—
- (a) if it is the surrender of part of the rights conferred by the policy, the value of the rights surrendered at the time of the surrender;
- (b) if it is the conversion of the policy into a partly paid-up policy, the surrender value at the time of the conversion, of so much of the policy as is paid up; and
- (c) if it is the falling due of a sum, that sum.
- (4) If the event was preceded by the happening of such an event as is mentioned in subsection (1) above, subsection (2) above shall apply—
- (a) as if the lower of the amounts mentioned therein were reduced by the sum paid under this section in respect of the earlier event; and
- (b) if the earlier event was such an event as is mentioned in paragraph (a) or (c) of subsection (3) above, as if the surrender value of the policy were increased by the amount which, under that paragraph, limited or might have limited the sum payable under this section in respect of the earlier event.
- (5) For the purposes of this section the appropriate percentage, in relation to any event, is the percentage equal to the following fraction of the percentage found by doubling that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happened, that is to say—
- (a) if the event happens in the first two of the four years mentioned in subsection (1) above, three-sixths;
- (b) if it happens in the third of those years, two-sixths; and
- (c) if it happens in the last of those years, one-sixth;
and the complementary percentage, in relation to any event, is 100 per cent. less the appropriate percentage.
- (6) Where the annual amount of the premiums payable under a policy of life insurance is at any time increased (whether under the policy or by any contract made after its issue) so as to exceed by more than 25 per cent.—
- (a) if the insurance was made on or before 26th March 1974, the annual amount as at that date, or
- (b) in the case of any other insurance, the first annual amount so payable,
the additional rights attributable to the excess shall be treated for the purposes of this section as conferred by a new policy issued in respect of an insurance made at that time, and the excess shall be treated as premiums payable under the new policy.
- (7) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy of life insurance issued in connection with a registered pension scheme;
and in relation to a policy of life insurance issued in respect of an insurance made before 27th March 1974 applies only in accordance with subsection (6) above.
#### Surrender etc. of policies after four years
##### 269
- (1) Where a policy of life insurance to which this section applies has been issued and, in the fifth or any later year from the making of the insurance in respect of which it was issued, either of the following events happens, that is to say—
- (a) the surrender of the whole or part of the rights conferred by the policy; and
- (b) the falling due (otherwise than on death or maturity) of a sum payable in pursuance of a right conferred by the policy to participate in profits;
then, if either of those events has happened before, the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender, or, as the case may be, out of the sum falling due, a sum determined in accordance with the following provisions of this section.
- (2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the applicable percentage of the lower of the following—
- (a) the total of the premiums which are payable in that year under the policy; and
- (b) the sums payable by reason of the surrender or, as the case may be, the sum falling due;
and the percentage to be applied for this purpose shall be a percentage equal to that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happens.
- (3) Where, after a sum has become payable under subsection (1) above, and within the same year from the making of the insurance, another such event happens as is mentioned therein, the sums payable under that subsection in respect of both or all of the events shall not exceed the applicable percentage of the total mentioned in subsection (2)(a) above.
- (4) Where, on the happening of an event in the fifth or any later year from the making of the insurance, any sum is payable under subsection (1) of section 268 as applied by subsection (6) of that section as well as under subsection (1) above, subsection (2) above shall apply as if the sums or sum mentioned in paragraph (b) thereof were reduced by the sum payable under that section.
- (5) This section applies to any policy of life insurance which is a qualifying policy unless—
- (a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or
- (b) it is a policy issued in the course of an industrial insurance business; or
- (c) it was issued in respect of an insurance made before 27th March 1974.
#### Provisions supplementary to sections 268 and 269
##### 270
- (1) Where on the happening of an event in relation to a policy of life insurance a sum is payable under section 268 or 269, relief under section 266 in respect of the relevant premiums paid under the policy shall be reduced by the sum so payable or, as the case may be, by so much of the sum as does not exceed the amount of that relief (or as does not exceed so much of that amount as remains after any previous reduction under this section).
- (2) For the purposes of this section the relevant premiums are—
- (a) in relation to a sum payable under section 268, the premiums payable under the policy up to the happening of the event by reason of which the sum is payable; and
- (b) in relation to a sum payable under section 269, the premiums payable in the year (from the making of the insurance) in which the event happens by reason of which the sum is payable.
- (3) Where the relevant premiums are payable in more than one year of assessment the reduction in relief under this section shall, so far as possible, reduce relief for an earlier year of assessment before reducing relief for a later one.
- (4) Any sum paid under section 268 or 269 by reason of any event shall be treated—
- (a) as between the parties, as received by the person by whom the premiums under the policy were paid; and
- (b) for the purposes of section 266, as a sum paid by that person in satisfaction of his liability resulting from the reduction of relief under this section;
and where that sum exceeds that liability he shall be entitled, on a claim made by him not later than 4 years after the end of the year of assessment in which the event happens, to repayment of the excess.
#### Deemed surrender in cases of certain loans
##### 271
- (1) Where—
- (a) by virtue of section 465 of ITTOIA 2005 a gain arising in connection with a policy . . . would be treated as forming part of an individual’s total income; and
- (b) the policy was issued in respect of an insurance made after 26th March 1974 . . .; and
- (c) any sum is at any time after the making of the insurance . . . lent to or at the direction of that individual by or by arrangement with the body issuing the policy . . .;
then, subject to subsection (2) below, the same results shall follow under sections 268 to 270 as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy . . . and the sum had been paid as consideration for the surrender (and if the policy is a qualifying policy, whether or not the premiums under it are eligible for relief under section 266, those results shall follow under section 269, whether or not a gain would be treated as arising on the surrender).
- (2) Subsection (1) above does not apply—
- (a) in relation to a policy if—
- (i) it is a qualifying policy; and
- (ii) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Collection of sums payable under sections 268 and 269
##### 272
- (1) Any body by whom a policy to which section 268 or 269 applies has been issued shall, within 30 days of the end of each period of 12 months ending with 31st March in every year, make a return to the collector of the sums which, in that period, have become payable by it under either of those sections.
- (2) Any sum which is to be included in a return made under subsection (1) above shall be due at the time by which the return is to be made and shall be paid without being demanded.
- (3) Where any sum which was or ought to have been included in such a return is not paid by the end of the period for which the return was to be made, it may be recovered by an assessment as if it were income tax for the year of assessment in which that period ends; and where it appears to the inspector that a sum which ought to have been so included had not been included or that a return is not correct he may make such an assessment to the best of his judgment.
- (4) All the provisions of the Income Tax Acts relating to the assessment and collection of tax, interest on unpaid tax, appeals and penalties shall, with the necessary modifications, apply in relation to sums due under this section; and for the purposes of those provisions so far as they relate to interest on unpaid tax, a sum assessed in pursuance of this section shall be treated as having been payable when it would have been payable had it been included in a return under subsection (1) above.
- (5) Where, on an appeal against an assessment made in pursuance of this section, it is determined that a greater sum has been assessed than was payable, the excess, if paid, shall be repaid.
- (6) Where a body has paid a sum which is payable under section 268 or 269 it shall give within 30 days to the person by whom the sum is, under section 270(4), treated as received a statement specifying that sum and showing how it has been arrived at.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments securing widows' and children’s annuities
##### 273
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limits on relief under sections 266 and 273
##### 274
- (1) The aggregate of the premiums . . . in respect of which relief is given to any person under section 266 shall not exceed £1,500 in any year of assessment or one-sixth of that person’s total income, whichever is the greater.
- (2) The aggregate of the relief given under section 266 in respect of premiums . . . payable for securing any benefits other than capital sums on death shall not exceed the amount of the income tax calculated at 12.5% on £100.
#### Set-off of income tax and tax credits against corporation tax
##### 447
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income or of £100 mentioned in this section.
### Supplemental
#### Meaning of “relative”
##### 275
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect on relief of charges on income
##### 276
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Partners
##### 277
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Non-residents
##### 278
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — TAXATION OF INCOME OF SPOUSES AND CIVIL PARTNERS
### General rules
#### Aggregation of wife’s income with husband's
##### 279
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of reliefs
##### 280
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax repayments to wives
##### 281
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Construction of references to married women living with their husbands
##### 282
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Separate assessments
#### Option for separate assessment
##### 283
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Effect of separate assessment on personal reliefs
##### 284
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Collection from wife of tax assessed on husband but attributable to her income
##### 285
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Right of husband to disclaim liability for tax on deceased wife’s income
##### 286
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Separate taxation
#### Separate taxation of wife’s earnings
##### 287
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Elections under section 287
##### 288
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — ENTERPRISE INVESTMENT SCHEME
#### The relief
##### 289
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Minimum and maximum subscriptions
##### 290
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Individuals qualifying for relief
##### 291
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Parallel trades
##### 292
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
##### 293
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies with interests in land
##### 294
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Valuation of interests in land for purposes of section 294(1)(b)
##### 295
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Section 294 disapplied where amounts raised total £50,000 or less
##### 296
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trades
##### 297
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 293 and 297
##### 298
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disposal of shares
##### 299
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Value received from company
##### 300
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to section 300
##### 301
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Replacement capital
##### 302
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Value received by persons other than claimants
##### 303
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Husband and wife
##### 304
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reorganisation of share capital
##### 305
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims
##### 306
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Withdrawal of relief
##### 307
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application to subsidiaries
##### 308
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further provisions as to subsidiaries
##### 309
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information
##### 310
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Nominees, bare trustees and approved investment funds
##### 311
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter III
##### 312
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — SPECIAL PROVISIONS
#### Taxation of consideration for certain restrictive undertakings
##### 313
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Divers and diving supervisors
##### 314
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Wounds and disability pensions
##### 315
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowances, bounties and gratuities
##### 316
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Victoria Cross and other awards
##### 317
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other pensions in respect of death due to war service etc
##### 318
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Crown servants: foreign service allowance
##### 319
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commonwealth Agents-General and official agents etc
##### 320
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consuls and other official agents
##### 321
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Consular officers and employees
##### 322
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Visiting forces
##### 323
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Designated international organisations
##### 324
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on deposits with National Savings Bank
##### 325
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest etc. under contractual savings schemes
##### 326
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disabled person’s vehicle maintenance grant
##### 327
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Funds in court
##### 328
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on damages for personal injuries
##### 329
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Compensation for National-Socialist persecution
##### 330
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Scholarship income
##### 331
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Expenditure and houses of ministers of religion
##### 332
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying distributions and tax credits
##### 448
#### Double taxation agreements
##### 449
### Underwriters
#### Assessment, set-off of losses and reinsurance
##### 450
#### Regulations
##### 451
#### Special reserve funds
##### 452
#### Payments into premiums trust fund on account of losses
##### 453
#### Income tax consequences on payments into and out of special reserve fund
##### 454
#### Income tax consequences on death of underwriter
##### 455
#### Unearned income, variation of arrangements and cancellation of approval etc
##### 456
#### Interpretation of sections 450 to 456
##### 457
### Capital redemption business
#### Capital redemption business
##### 458
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — FRIENDLY SOCIETIES, TRADE UNIONS AND EMPLOYERS’ ASSOCIATIONS
### Unregistered friendly societies
#### Exemption from tax
##### 459
An unregistered friendly society (that is, a friendly society which is neither an incorporated friendly society nor a registered friendly society) whose income does not exceed £160 a year shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains).
### Registered friendly societies
#### Exemption from tax in respect of life or endowment business
##### 460
- (1) Subject to subsection (2) below, a friendly society shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits arising from life or endowment business.
- (2) Subsection (1) above—
- (a) shall not, subject to section 462, exempt a registered friendly society registered after 31st December 1957 which at any time in the period of three months ending 3rd May 1966 entered into any transaction in return for a single premium, being a transaction forming part of its life or endowment business;
- (aa) shall not, subject to section 462, exempt an incorporated friendly society which, before its incorporation, was a registered friendly society such as is mentioned in paragraph (a) above;
- (b) shall not apply to profits arising from gross roll-up business;
- (c) shall not apply to profits arising from life or endowment business consisting—
- (zai) where the profits relate to contracts made on or after the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £270 or of the granting of annuities of annual amounts exceeding £156;
- (ai) where the profits relate to contracts made on or after the day on which the Finance Act 1991 was passed but before the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £200 or of the granting of annuities of annual amounts exceeding £156;
- (i) where the profits relate to contracts made after 31st August 1990 but before the day on which the Finance Act 1991 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £150 or of the granting of annuities of annual amounts exceeding £156;
- (ia) where the profits relate to contracts made after 31st August 1987 but before 1st September 1990, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £100 or of the granting of annuities of annual amounts exceeding £156.
- (ii) where the profits relate to contracts made after 13th March 1984 but before 1st September 1987, of the assurance of gross sums exceeding £750 or of the granting of annuities of annual amounts exceeding £156;
- (iii) where the profits relate to contracts made before 14th March 1984, of the assurance of gross sums exceeding £500 or of the granting of annuities of annual amounts exceeding £104;
- (ca) shall not apply to so much of the profits arising from life or endowment business as is attributable to contracts for the assurance of gross sums made on or after 20th March 1991 and expressed at the outset not to be made in the course of tax exempt life or endowment business;and
- (cb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) as respects other life or endowment business (“tax exempt life or endowment business”), has effect subject to the following provisions of this Chapter.
- (3) In determining for the purposes of subsection (2)(c)(zai), (ai), (i) or (ia) above the total premiums payable in any period of 12 months—
- (a) where those premiums are payable more frequently than annually, there shall be disregarded an amount equal to 10 per cent. of those premiums; and
- (b) so much of any premium as is charged on the ground that an exceptional risk of death or disability is involved shall be disregarded;
and in applying the limit of £156 in subsection (2)(c)(zai), (ai), (i) or (ia) above, any bonus or addition declared upon an annuity shall be disregarded.
- (4) In applying the limits referred to in subsection (2)(c)(ii) and (iii) above, any bonus or addition which either is declared upon an assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments shall be disregarded.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under tax exempt life or endowment business made after 31st August 1987 and before the day on which the the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (2)(c) above, be treated, in relation to any profits relating to it as varied, as made at the time of the variation.
- (5) A friendly society is within this subsection if its rules make no provision for it to carry on life or endowment business consisting of the assurance of gross sums exceeding £2,000 or of the granting of annuities of annual amounts exceeding £416.
- (6) In the case of a friendly society within subsection (5) above—
- (a) subsection (2)(c)(iii) above shall have effect with the substitution of references to £2,000 and £416 respectively for the references to £500 and £104; and
- (b) references in this Chapter to tax exempt life or endowment business shall be construed accordingly.
- (7) Where at any time a friendly society within subsection (5) above amends its rules so as to cease to be within that subsection, any part of its 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,
shall thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (8) Where at any time a friendly society not within subsection (5) above amends its rules so as to bring itself within that subsection, any part of its life or endowment business consisting of business which—
- (a) related to contracts made before that time; and
- (b) immediately before that time was not tax exempt life or endowment business,
shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (9) Where at any time a friendly society not within subsection (5) above acquires by way of transfer of engagements or amalgamation from another 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 thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (10) Where at any time a friendly society within subsection (5) above acquires by way of transfer of engagements or amalgamation from another 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 not tax exempt life or endowment business,
that business shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (10A) Where at any time an insurance business transfer scheme has effect to transfer to a friendly society long-term business, any life or endowment business which relates to contracts included in the transfer , other than any to which subsection (11) or (12) below applied immediately before the transfer had effect, shall not thereafter be tax exempt life or endowment business for the purposes of this Chapter.
- (10B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) Where at any time a friendly society ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, any part of its 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,
shall continue to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it.
- (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.
- (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.
#### Taxation in respect of other business
##### 461
- (1) Subject to the following provisions of this section, a registered friendly society other than a society to which subsection (2) below applies shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) This subsection applies to any society registered after 31st May 1973 unless—
- (a) its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board; or
- (b) it was registered before 27th March 1974 and its rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as the Board may authorise for the purposes of this section;
and also applies to any society registered before 1st June 1973 with respect to which a direction under subsection (7) below is in force.
- (3) If a society to which subsection (2) above applies, after 26th March 1974 or such later date as may be specified in a direction under this section, makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society after that date, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a registered friendly society—
- (a) at any time ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act; and
- (b) immediately before that time was exempt from . . . corporation tax on profits arising from any business carried on by it other than life or endowment business,
the company into which the society is converted shall be so exempt on its profits arising from any part of that business which relates to contracts made before that time so long as there is no increase in the scale of benefits which it undertakes to provide in the course of carrying on that part of its business.
- (4A) Where—
- (a) at any time an insurance company acquires by way of transfer of engagements from a registered friendly society any business other than life or endowment business, and
- (b) immediately before that time the society was exempt from corporation tax on profits arising from that business,
the insurance company shall be exempt from corporation tax on its profits arising from any part of that business which relates to contracts made before that time.
- (4B) But if during an accounting period of the insurance company there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on any such part of that business, the company shall not be exempt from corporation tax by virtue of subsection (4A) above for that or any subsequent accounting period.
- (5) For the purposes of the Corporation Tax Acts any part of a company’s business in respect of the profits from which the company is exempt by virtue of subsection (4) or (4A) above shall be treated as a separate business from any other business carried on by the company.
- (6) If—
- (a) a friendly society registered before 1st June 1973 begins after 26th March 1974 to carry on business other than life or endowment business or, in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character; and
- (b) it appears to the Board, having regard to the restrictions imposed by this section on friendly societies registered later, that for the protection of the revenue it is expedient to do so;
the Board may give a direction to the society under subsection (7) below.
- (7) A direction under this subsection is that (and has the effect that) the society to which it is given is to be treated for the purposes of this Act as a society registered after 31st May 1973 with respect to business carried on after the date of the direction.
- (8) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction . . . on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (6)(a) above; or
- (b) the direction is not necessary for the protection of the revenue.
- (9) If a registered friendly society in respect of which a direction is in force under subsection (7) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a society registered after 31st May 1973.
- (10) For the purposes of this section a registered friendly society formed on the amalgamation of two or more friendly societies shall be treated as registered before 1st June 1973 if at the time of the amalgamation subsection (2) above did not apply to any of the societies amalgamated, but otherwise shall be treated as registered at that time.
- (11) For the purposes of this section and section 461C—
- (a) any group of persons which was approved for the purposes of this section (as mentioned in subsection (2)(a) above) immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date;
- (b) any greater amount which was authorised for the purposes of this section (as mentioned in subsection (2)(b) above) immediately before 1st December 2001 shall be treated as having been authorised for the purposes of this section by the Board on that date; and
- (c) where a direction that subsection (2) above applies to a society was in force immediately before 1st December 2001, a direction in relation to that society shall be treated as having been made under subsection (7) above by the Board on that date.
- (12) 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 (4) or (4A) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (13) Regulations under subsection (12) 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.
#### Conditions for tax exempt business
##### 462
- (1) Subject to subsection (2) below, section 460 does not afford any exemption from corporation tax in relation to so much of the profits arising to a friendly society or insurance company from any business as is attributable to a policy which—
- (a) is not a qualifying policy (by virtue of sub-paragraph (2) of paragraph 6 of Schedule 15) and is not an excluded policy, and
- (b) would not be a qualifying policy (by virtue of that sub-paragraph) if all excluded policies were left out of account.
- (1A) For the purposes of subsection (1) above a policy is an excluded policy if—
- (a) it is a policy held otherwise than with the friendly society or insurance company, or
- (b) the person who has the contract effecting the policy acquired the rights under it on an assignment (or, in Scotland, assignation) otherwise than for money or money's worth.
- (2) Section 460(2)(a) or (aa) and subsection (1) above shall not withdraw exemption in relation to profits arising from any part of a business relating to contracts made not later than 3rd May 1966.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life or endowment business: application of the Corporation Tax Acts
##### 463
- (1) Subject to section 460(1), the Corporation Tax Acts shall apply to long-term business carried on by friendly societies in the same way as they apply to mutual life assurance business (or other long-term business) carried on by insurance companies, so however that the Treasury may by regulations provide that those Acts as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations, and those regulations may in particular require any part of any business to be treated as a separate business.
- (2) The provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company shall apply in the same way—
- (a) on the transfer of the whole or part of the business of a friendly society to another friendly society (and on the amalgamation of friendly societies), and
- (b) on the transfer of the whole or part of the business of a friendly society to a company which is not a friendly society (and on the conversion of a friendly society into such a company),
so however that the Treasury may by regulations provide that those provisions as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations.
- (3) The Treasury may by regulations provide that the provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company to another company shall have effect where the transferee is a friendly society subject to such modifications and exceptions as may be prescribed by the regulations.
- (4) Regulations under this section may make different provision for different cases and may include provision having retrospective effect.
#### Maximum benefits payable to members
##### 464
- (1) Subject to subsections (2) and (3) below, a person is not entitled to have at any time outstanding contracts with any one or more friendly societies, registered branches or insurance companies which (taking them all together) are for the assurance of—
- (a) more than £750 by way of gross sum under business which is afforded exemption from corporation tax by section 460, or
- (b) more than £156 by way of annuity under such business.
In any case where the member’s outstanding contracts were all made before 14th March 1984 this subsection shall have effect with the substitution for “£750” and “£156” of “ £2,000 ” and “ £416 ” respectively.
- (2) Subsection (1)(a) above shall not apply as respects sums assured under contracts made after 31st August 1987.
- (3) With respect to contracts for the assurance of gross sums under business which is afforded exemption from corporation tax by section 460, a person is not entitled to have outstanding at any time with any one or more friendly societies, registered branches or insurance companies—
- (zza) contracts under which the total premiums payable in any period of 12 months exceed £270; or
- (za) contracts made before the day on which the Finance Act 1995 was passed and under which the total premiums payable in any period of 12 months exceed £200; or
- (a) contracts made before the day on which the Finance Act 1991 was passed and under which the total premiums payable in any period of 12 months exceed £150; or
- (b) contracts made before 1st September 1990 under which the total premiums payable in any period of 12 months exceed £100,
unless all those contracts were made before 1st September 1987.
- (4) In applying the limits in subsection (3) above, the premiums under any contract for an annuity which was made before 1st June 1984 by a new society shall be brought into account as if the contract were for the assurance of a gross sum.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under business which is afforded exemption from corporation tax by section 460 if they are made after 31st August 1987 and before the day on which the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (3) above, be treated, in relation to times when the contract has effect as varied, as made at the time of the variation.
- (5) In applying the limits in this section there shall be disregarded—
- (a) any bonus or addition which either is declared upon assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments;
- (b) any policy of insurance or annuity contract by means of which the benefits to be provided under an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) are secured or any annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than such an occupational pension scheme;
- (c) any increase in a benefit under a friendly society contract, as defined in section 6 of the Decimal Currency Act 1969, resulting from the adoption of a scheme prescribed or approved in pursuance of subsection (3) of that section; and
- (d) so far as concerns the total premiums payable in any period of 12 months—
- (i) 10 per cent. of the premiums payable under any contract under which the premiums are payable more frequently than annually; and
- (ii) £10 of the premiums payable under any contract made before 1st September 1987 by a friendly society other than a new society; and
- (iii) so much of any premium as is charged on the ground that an exceptional risk of death is involved.
- (6) In applying the limits in this section in any case where a person has outstanding with one or more societies, branches or companies one or more contracts made after 13th March 1984 and one or more contracts made on or before that date, any contract for an annuity which was made before 1st June 1984 by a new society shall be regarded not only as a contract for the annual amount concerned but also as a contract for the assurance of a gross sum equal to 75 per cent. of the total premiums which would be payable under the contract if it were to run for its full term or, as the case may be, if the member concerned were to die at the age of 75 years.
- (7) A friendly society , registered branch or insurance company may require a person to make and sign a statutory declaration that the total amount assured under outstanding contracts entered into by that person with any one or more friendly societies, registered branches or insurance companies (taken together) does not exceed the limits applicable by virtue of this section and that the total premiums under those contracts do not exceed those limits.
#### Old societies
##### 465
- (1) In this section “*old society*” means a friendly society which is not a new society.
- (2) This section applies if, on or after 19th March 1985, an old society—
- (a) begins to carry on tax exempt life or endowment business; or
- (b) in the opinion of the Board begins to carry on such business on an enlarged scale or of a new character.
- (3) If it appears to the Board, having regard to the restrictions placed on qualifying policies issued by new societies by paragraphs 3(1)(b) . . . and 4(3)(b) of Schedule 15, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the old society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the old society to which it is given is to be treated for the purposes of this Act as a new society with respect to business carried on after the date of the direction.
- (5) An old society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction . . . on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (2) above; or
- (b) that the direction is not necessary for the protection of the revenue.
- (6) If a registered friendly society in respect of which a direction is in force under subsection (4) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a new society.
#### Interpretation of Chapter II
##### 466
- (1) In this Chapter “*life or endowment business*” means, subject to subsections (1A) and (1B) below—
- (a) any life assurance business, and
- (b) any PHI business (as defined in section 431) if—
- (i) the contract is one made before 1 September 1996, or
- (ii) the contract is one made on or after that date and the effecting and carrying out of the business also constitutes business within paragraphs I, II or III of Part II of Schedule 1 to the Financial Services and Markets Act (Regulated Activities) Order 2001.
- (1A) Life or endowment business does not include the issue, in respect of a contract made before 1st September 1996, of a policy affording provision for sickness or other infirmity (whether bodily or mental), unless—
- (a) the policy also affords assurance for a gross sum independent of sickness or other infirmity;
- (b) not less than 60 per cent. of the amount of the premiums is attributable to the provision afforded during sickness or other infirmity; and
- (c) there is no bonus or addition which may be declared or accrue upon the assurance of the gross sum.
- (1B) Life or endowment business does not include the assurance of any annuity the consideration for which consists of sums obtainable on the maturity, or on the surrender, of any other policy of assurance issued by the friendly society, being a policy of assurance forming part of the tax exempt life or endowment business of the friendly society.
- (2) In this Chapter—
- “*friendly society*”, without qualification, means (except in section 459) an incorporated friendly society or a registered friendly society;
- “*gross roll-up business*” shall be construed in accordance with section 431;
- “*incorporated friendly society*” means a society incorporated under the Friendly Societies Act 1992;
- “*insurance company*” shall be construed in accordance with section 431;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*long-term business*” shall be construed in accordance with section 431;
- “*new society*” means—a registered friendly society which was registered after 3rd May 1966 or which was registered in the period of three months ending on that date but which at no time earlier than that date carried on any life or endowment business, oran incorporated friendly society other than one which, before its incorporation, was a registered friendly society not within paragraph (a) above;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*policy*”, in relation to life or endowment business, includes an instrument evidencing a contract to pay an annuity upon human life;
- “*registered branch*” means the same as in the Friendly Societies Act 1992 (and includes any branch that by virtue of section 96(3) of that Act is to be treated as a registered branch);
- “*registered friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society);
- . . .
- “*tax exempt life or endowment business*” has, subject to subsections (7) to (10A) of section 460, the meaning given by subsection (2)(d) of that section, that is to say, it means (subject to those subsections) life or endowment business other than business profits arising from which are excluded from subsection (1) of that section by subsection (2)(b) or (c) of that section (read, where appropriate, with subsection (6) of that section);
and references in sections 460 to 465 and this subsection to a friendly society include, in the case of a registered friendly society, references to any branch of that society.
- (2ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) It is hereby declared that for the purposes of this Chapter (except where provision to the contrary is made) a friendly society formed on the amalgamation of two or more friendly societies is to be treated as different from the amalgamated societies.
- (4) A registered friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society;
or, if the amalgamation took place before 19th March 1985, the society was treated as registered not later than 3rd May 1966 by virtue of the proviso to section 337(4) of the 1970 Act.
- (5) An incorporated friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as a society which, before its incorporation, was a registered friendly society registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society.
### Trade unions and employers’ associations
#### Exemption for trade unions and employers' associations
##### 467
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — UNIT TRUST SCHEMES, DEALERS IN SECURITIES ETC.
### Unit trust schemes
#### Authorised unit trusts
##### 468
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other unit trusts
##### 469
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transitional provisions relating to unit trusts
##### 470
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -2926,2126 +4874,100 @@
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Personal equity plans
##### 333
Regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) may include provision generally for the purpose of the administration of corporation tax in relation to plans.
### CHAPTER V — RESIDENCE OF INDIVIDUALS
#### Commonwealth citizens and others temporarily abroad
##### 334
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Residence of persons working abroad
##### 335
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Temporary residents in the United Kingdom
##### 336
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART VIII — TAXATION OF INCOME AND CHARGEABLE GAINS OF COMPANIES
### Taxation of income
#### Companies beginning or ceasing to carry on a trade
##### 337
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowance of charges on income and capital
##### 338
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charges on income: donations to charity
##### 339
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charges on income: interest payable to non-residents
##### 340
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments of interest etc. between related companies
##### 341
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax on company in liquidation
##### 342
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Company reconstructions without a change of ownership
##### 343
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Company reconstructions: supplemental
##### 344
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Chargeable gains
#### Computation of chargeable gains
##### 345
#### Capital distribution of chargeable gains: recovery of tax from shareholder
##### 346
#### Tax on one member of group recoverable from another member
##### 347
## PART IX — ANNUAL PAYMENTS AND INTEREST
### Annual payments
#### Payments out of profits or gains brought into charge to income tax: deduction of tax
##### 348
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments not out of profits or gains brought into charge to income tax, and annual interest
##### 349
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to tax where payments made under section 349
##### 350
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Small maintenance payments
##### 351
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Certificates of deduction of tax
##### 352
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Relief for payments of interest (excluding MIRAS)
#### General provision
##### 353
- (1) Where a person pays interest in any year of assessment, that person, if he makes a claim to the relief, shall for that year of assessment be entitled (subject to . . . section 52 of ITTOIA 2005) to relief in accordance with this section in respect of so much (if any) of the amount of that interest as is eligible for relief under this section by virtue of section 365.
- (1A) Where a person is entitled for a year of assessment to relief under this section in respect of an amount of interest which is eligible for relief by virtue of section 365, the relief is given as a tax reduction for that tax year.
- (1AA) The amount of the tax reduction is 23% of the amount of the interest.
- (1AB) The tax reduction is given effect at Step 6 of the calculation in section 23 of ITA 2007.
- (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1E) Where any person is entitled for any year of assessment to relief . . . in respect of any amount of interest as is eligible for that relief partly as mentioned in subsection (1A) above and partly as mentioned in section 383 of ITA 2007 (relief for interest payments), that amount of interest shall be apportioned between the cases to which each of those provisions applies without regard to what parts of the total amount borrowed remain outstanding but according to . . . —
- (a) the proportions of the total amount borrowed which were applied for different purposes; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and subsection (1A) above or section 383 of ITA 2007 shall apply accordingly to the case in which that subsection or section applies.
- (1F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) This section does not apply to a payment of relevant loan interest to which section 369 applies.
- (3) Relief under this section shall not be given in respect of—
- (a) interest on a debt incurred by overdrawing an account or by debiting the account of any person as the holder of a credit card or under similar arrangements; or
- (b) where interest is paid at a rate in excess of a reasonable commercial rate, so much of the interest as represents the excess.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Dealers in securities, banks and insurance businesses
#### Exchange of securities in connection with conversion operations, nationalisation etc
##### 471
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Distribution of securities issued in connection with nationalisation etc
##### 472
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conversion etc. of securities held as circulating capital
##### 473
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of tax-free income
##### 474
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax-free Treasury securities: exclusion of interest on borrowed money
##### 475
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — BUILDING SOCIETIES, BANKS, SAVINGS BANKS, INDUSTRIAL AND PROVIDENT SOCIETIES AND OTHERS
#### Building societies: regulations for payment of tax
##### 476
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Investments becoming or ceasing to be relevant building society investments
##### 477
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Building societies: time for payment of tax
##### 478
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest paid on deposits with banks etc
##### 479
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deposits becoming or ceasing to be composite rate deposits
##### 480
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Deposit-taker”, “deposit” and “relevant deposit”
##### 481
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions
##### 482
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Determination of reduced rate for building societies and composite rate for banks etc
##### 483
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) If the order made under section 26 of the Finance Act 1984 in the year 1987-88 is made in pursuance of subsection (4) of that section, that order shall, notwithstanding that that subsection is not re-enacted by this Act, apply for the purposes of sections 476 and 479 for the year 1988-89.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans to buy land etc
##### 354
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Matters excluded from section 354
##### 355
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Job-related accommodation
##### 356
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limit on amount of loan eligible for relief by virtue of section 354
##### 357
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief where borrower deceased
##### 358
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy machinery or plant
##### 359
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy interest in close company
##### 360
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy interest in co-operative or employee-controlled company
##### 361
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy into partnership
##### 362
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 360 to 362
##### 363
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to pay inheritance tax
##### 364
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loan to buy life annuity
##### 365
- (1) Subject to the following provisions of this section, interest is eligible for relief under section 353 if it is interest on a loan in respect of which the following conditions are satisfied—
- (aa) that the loan was made before 9th March 1999;
- (a) that the loan was made as part of a scheme under which not less than nine-tenths of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (“*the annuitants*”) who include the person to whom the loan was made;
- (b) that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of 65 years;
- (c) that the loan was secured on land in the United Kingdom or the Republic of Ireland and the person to whom it was made or one of the annuitants owns an estate or interest in that land; and
- (d) that, if the loan was made after 26th March 1974, the person to whom it was made or each of the annuitants used the land on which it was secured as his only or main residence immediately before 9th March 1999 .
- (1AA) Where—
- (a) a loan made on or after 9th March 1999 was made in pursuance of an offer made by the lender before that date, and
- (b) the offer was either in writing or evidenced by a note or memorandum made by the lender before that date,
the loan shall be deemed for the purposes of subsection (1)(aa) above to have been made before that date.
- (1AB) Subject to subsection (1AC) below, the conditions in paragraphs (aa) and (a) of subsection (1) above shall be treated as satisfied in relation to a loan (“*the new loan*”) if—
- (a) the new loan was made on or after the day on which the Finance Act 1999 was passed;
- (b) the new loan was made as part of a scheme (“*the scheme*”) under which the whole or any part of the proceeds of the loan was used to defray money applied in paying off another loan (“*the old loan*”); and
- (c) the conditions in subsection (1) above were, or were treated by virtue of this subsection as, satisfied with respect to the old loan.
- (1AC) If only part of the proceeds of the new loan was used to defray money applied in paying off the old loan, subsection (1AB) above applies only if, under the scheme, not less than nine-tenths of the remaining part of the proceeds of the new loan was applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons who include him.
- (1AD) In subsection (1AC) above “*the remaining part*” means the part of the proceeds of the new loan that was not used to defray money applied in paying off the old loan.
- (1A) The condition in subsection (1)(d) above shall be treated as satisfied in relation to a loan if—
- (a) the person to whom the loan was made, or any of the annuitants, ceased to use the land as his only or main residence at a time falling within the period of twelve months ending with 8th March 1999, and
- (b) the intention at that time of the person to whom the loan was made, or each of the annuitants owning an estate or interest in the land, was to take steps, before the end of the period of twelve months after the day on which the land ceased to be so used, with a view to the disposal of his estate or interest.
- (1B) If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case subsection (1A) above shall have effect as if for the reference to 12 months there were substituted a reference to such longer period as meets the circumstances of that case.
- (2) Interest is not eligible for relief by virtue of this section unless it is payable by the person to whom the loan was made or by one of the annuitants.
- (3) If the loan was made after 26th March 1974 interest on it is eligible for relief by virtue of this section only to the extent that the amount on which it is payable does not exceed the sum of £30,000; and if the interest is payable by two or more persons the interest payable by each of them is so eligible only to the extent that the amount on which it is payable does not exceed such amount as bears to that sum the same proportion as the interest payable by him bears to the interest payable by both or all of them.
#### Information
##### 366
- (1) A person who claims relief under section 353 in respect of any payment of interest shall furnish to the inspector a statement in writing by the person to whom the payment is made, showing—
- (a) the date when the debt was incurred;
- (b) the amount of the debt when incurred;
- (c) the interest paid in the year of assessment for which the claim is made . . . ; and
- (d) the name and address of the debtor.
- (2) Where any such interest as is mentioned in section 353 is paid, the person to whom it is paid shall, if the person who pays it so requests in writing, furnish him with such statement as regards that interest as is mentioned in subsection (1) above; and the duty imposed by this subsection shall be enforceable at the suit or instance of the person making the request.
- (3) Subsections (1) and (2) above do not apply to interest paid to a building society, or to a local authority.
#### Provisions supplementary to sections 354 to 366
##### 367
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In section 365(3) references to the qualifying maximum for the year of assessment are references to such sum as Parliament may determine for the purpose for that year.
#### Exclusion of double relief etc
##### 368
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Mortgage interest relief at source
#### Mortgage interest payable under deduction of tax
##### 369
- (1) If a person who is a qualifying borrower makes a payment of relevant loan interest to which this section applies, he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to the applicable percentage thereof.
- (1A) In subsection (1) above “*the applicable percentage*” means 23 per cent..
- (2) Where a sum is deducted under subsection (1) above from a payment of relevant loan interest—
- (a) the person to whom the payment is made shall allow the deduction on receipt of the residue;
- (b) the borrower shall be acquitted and discharged of so much money as is represented by the deduction as if the sum had been actually paid; and
- (c) the sum deducted shall be treated as income tax paid by the person to whom the payment is made.
- (3) The following payments, that is to say—
- (a) payments of relevant loan interest to which this section applies, and
- (b) payments which would be such payments but for section 373(5),
shall not be allowable as deductions for any purpose of the Income Tax Acts except in so far as they fall to be treated as such payments by virtue only of section 375(2) and would be allowable apart from this subsection.
- (6) Sections 967(2) and 968(2) of CTA 2010 do not apply to a payment of relevant loan interest to which this section applies, but any person by whom such a payment is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (2)(c) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the payment of relevant loan interest to which it relates.
- (7) The following provisions of the Management Act, namely—
- (a) section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act;
- (b) section 30 (tax repaid in error etc.) apart from subsection (1B),
- (c) section 86 (interest), and
- (d) section 95 (incorrect return or accounts),
shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due.
- (8) In the application of section 86 of the Management Act by virtue of subsection (7) above in relation to sums due and payable by virtue of an assessment made for the whole or part of a year of assessment (“the relevant year of assessment”) under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date—
- (a) is 1st January in the relevant year of assessment in a case where the person falling within subsection (6) above has made a relevant interim claim; and
- (b) in any other case, is the later of the following dates, that is to say—
- (i) 1st January in the relevant year of assessment; or
- (ii) the date of the making of the payment by the Board which gives rise to the assessment.
- (9) In this section—
- “*financial year*”, in relation to any person, means a financial year of that person for the purposes of the relevant regulations;
- “*interim claim*” means an interim claim within the meaning of the relevant regulations;
- “*relevant interim claim*” means, in relation to an assessment made for a period coterminous with, or falling wholly within, a person’s financial year, an interim claim made for a period falling wholly or partly within that financial year; and
- “*the relevant regulations*” means regulations made under section 378(3) for the purposes of subsection (6) above.
#### Relevant loan interest
##### 370
- (1) Subject to this section and sections 373 to 376, in this Part “*relevant loan interest*” means interest which is paid and payable in the United Kingdom to a qualifying lender and to which subsection (2) . . . below applies.
- (2) Subject to subsection (4) below, this subsection applies to interest if, disregarding section 353(2) and any other provision applying to interest falling to be treated as relevant loan interest—
- (a) it is interest falling within section . . . 365; and
- (b) apart (where applicable) from section . . . 365(3), the whole of the interest would be eligible for relief under section 353;. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In determining whether subsection (2) above applies to any interest, section 365 shall have effect as if the words “or the Republic of Ireland” were omitted.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Second loans
##### 371
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Home improvement loans
##### 372
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Loans in excess of the qualifying maximum, and joint borrowers
##### 373
- (1) The provisions of this section have effect in relation to a loan where, by virtue of . . . section 365(3), only part of the interest on the loan would (apart from section 353(2)) be eligible for relief under section 353; and in this section any such loan is referred to as a “*limited loan*”.
- (2) None of the interest on a limited loan is relevant loan interest unless—
- (a) the loan is made on or after 6th April 1987; or
- (b) the qualifying lender to whom the interest is payable has given notice to the Board in accordance with regulations that he is prepared to have limited loans of a description which includes that limited loan brought within the tax deduction scheme.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) Where the condition in paragraph (a) or (b) of subsection (2) above is fulfilled . . . only so much of the interest as (apart from section 353(2)) would be eligible for relief under section 353 is relevant loan interest.
- (6) Where a loan on which interest is payable by the borrower was made jointly to the borrower and another person who is not the borrower’s husband or wife, the interest on the loan is not relevant loan interest unless—
- (a) each of the persons to whom the loan was made is a qualifying borrower; and
- (b) in relation to each of them considered separately, the whole of that interest is relevant loan interest, in accordance with section 370 and this section.
- (7) In subsection (6) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
#### Conditions for application of section 369
##### 374
- (1) Section 369 does not apply to any relevant loan interest unless—
- (a) in the case of a loan of a description specified by regulations for the purposes of this paragraph, the borrower or, in the case of joint borrowers, each of them has given notice to the lender in the prescribed form certifying—
- (i) that he is a qualifying borrower; and
- (ii) that the interest is relevant loan interest; and
- (iii) such other matters as may be prescribed; or
- (b) the Board have given notice to the lender and the borrower that the interest may be paid under deduction of tax; or
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) the loan to which the interest relates is of a description specified by regulations for the purposes of this paragraph and was made—
- (i) if sub-paragraph (2) of paragraph 2 of Schedule 7 to the Finance Act 1982 applied to interest on the loan which became due on or after a date earlier than 6th April 1983, being a date specified by the Board in pursuance of sub-paragraph (5) of that paragraph, before that earlier date; or
- (ii) if the qualifying lender is a building society or a local authority, before 1st April 1983; or
- (iii) if sub-paragraphs (i) and (ii) above do not apply and the interest falls within section 370(2), before 6th April 1983.
- (2) Where notice has been given as mentioned in paragraph (a) or (b) of subsection (1) above, section 369 applies to any relevant loan interest to which the notice relates and which becomes due on or after the relevant date, as defined by subsection (3) below; and in a case falling within paragraph . . . (d) of subsection (1) above, section 369 applies to the relevant loan interest referred to in that paragraph.
- (3) In subsection (2) above “*the relevant date*” means—
- (a) in the case of a notice under subsection (1)(a) above, the date the notice is given, and
- (b) in the case of a notice under subsection (1)(b) above, a date specified in the notice as being the relevant date (which may be earlier than the date so specified as the date from which the interest may be paid under deduction of tax).
#### Interest ceasing to be relevant loan interest, etc
##### 375
- (1) If at any time—
- (a) the interest on a loan ceases to be relevant loan interest; or
- (b) a person making payments of relevant loan interest ceases to be a qualifying borrower;
the borrower shall give notice of the fact to the lender.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) which is due after the time referred to in subsection (1) above and before the date on which notice is given under that subsection, and
- (aa) as respects which any of the conditions mentioned in section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to any deduction or to retain any amount deducted and, accordingly, where any amount that has been deducted exceeds the amount which ought to have been deducted, he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made.
- (4A) If there is any unreasonable delay in the giving of a notice under subsection (1) above, the borrower shall be liable to a penalty not exceeding so much of the aggregate amount that he is liable to make good under subsection (3) above as is attributable to that delay.
- (5) If, as a result of receiving a notice under subsection (1) above or otherwise, a qualifying lender has reason to believe that any interest is no longer relevant loan interest or that a borrower is no longer a qualifying borrower, the lender shall furnish the Board with such information as is in his possession with respect to those matters.
- (6) Where it appears to the Board that any of the provisions of sections 370 to 373 is not or may not be fulfilled with respect to any interest, or that a qualifying borrower has or may have ceased to be a qualifying borrower, they shall give notice of that fact to the lender and the borrower specifying the description of relevant loan interest concerned or, as the case may be, that the borrower has or may have ceased to be a qualifying borrower.
- (7) Section 369 shall not apply to any payment of relevant loan interest of a description to which a notice under subsection (6) above relates and which becomes due or is made after such date as may be specified in the notice and before such date as may be specified in a further notice given by the Board to the lender and the borrower.
- (8) In any case where—
- (a) section 369 applies to any relevant loan interest by virtue of a notice under section 374(1)(b), and
- (b) the relevant date specified in the notice is earlier than the date from which the interest begins to be paid under deduction of tax, and
- (c) a payment of that interest was made on or after the relevant date but not under deduction of tax,
regulations may provide for a sum to be paid by the Board of an amount equal to that which the borrower would have been able to deduct from that payment by virtue of section 369 if it had been made after the relevant date.
- (8A) In any case where an amount to which a person is not entitled is paid to him by the Board in pursuance of regulations made by virtue of subsection (8) above, regulations may—
- (a) provide for an officer of the Board to make such assessments as may in his judgment be required for recovering that amount from that person; and
- (b) make provision corresponding to that made by subsection (4A) above and subsections (4) and (5) of section 374A.
- (8B) Subsections (1), (5) and (6) above shall not apply where interest ceases to be relevant loan interest by virtue of section 38 of the Finance Act 1999.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying borrowers and qualifying lenders
##### 376
- (1) Subject to subsection (2) below, an individual is a qualifying borrower with respect to the interest on any loan.
- (2) In relation to interest paid at a time when the borrower or the borrower’s husband or wife holds an office or employment which would, but for some special exemption or immunity from tax, be a taxable employment under Part 2 of ITEPA 2003 (as defined by section 66(3) of that Act), the borrower is not a qualifying borrower.
- (3) In subsection (2) above references to the borrower’s husband or wife do not include references to a separated husband or wife . . . .
- (4) The following bodies are qualifying lenders:—
- (a) a building society;
- (b) a local authority;
- (c) the Bank of England;
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (e) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of long-term insurance;
- (f) any company to which property and rights belonging to a trustee savings bank were transferred by section 3 of the Trustee Savings Bank Act 1985;
- (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (h) a development corporation within the meaning of the New Towns Act 1981 or the New Towns (Scotland) Act 1968;
- (j) the Homes and Communities Agency;
- (k) the Regulator of Social Housing,
- (ka) the Secretary of State if the loan is made by him under section 79 of the Housing Associations Act 1985;
- (l) the Northern Ireland Housing Executive;
- (m) the Scottish Special Housing Association;
- (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (o) the Church of England Pensions Board;
- (p) any body which is for the time being registered under section 376A.
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Variation of terms of repayment of certain loans
##### 377
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary regulations
##### 378
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The Board may by regulations make provision—
- (a) for the purposes of any provision of sections 369 to 376A which relates to any matter or thing to be specified by or done in accordance with regulations;
- (b) for the application of those sections in relation to loan interest paid by personal representatives and trustees;
- (c) with respect to the furnishing of information by borrowers or lenders, including, in the case of lenders, the inspection of books, documents and other records on behalf of the Board;
- (d) for, and with respect to, appeals to the tribunal against the refusal of the Board to issue a notice under section 374(1)(b) or the issue of a notice under section 375(6) or (7); and
- (e) generally for giving effect to sections 369 to 376A.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of sections 369 to 378
##### 379
In sections 369 to 378—
- “contracts of general insurance” means contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contracts of long-term insurance” means contracts which fall within Part II of that Schedule;
- “*prescribed*” . . . means prescribed by the Board;
- “*qualifying borrower*” has the meaning given by section 376(1) to (3);
- “*qualifying lender*” has the meaning given by section 376(4) . . . ;
- “*regulations*” . . . means regulations made by the Board under section 378;
- “*relevant loan interest*” has the meaning given by section 370(1);
- “*separated*” means separated under an order of a court of competent jurisdiction or by deed of separation or in such circumstances that the separation is likely to be permanent.
## PART X — LOSS RELIEF AND GROUP RELIEF
### CHAPTER I — LOSS RELIEF: INCOME TAX
### Trade etc. losses
#### Set-off against general income
##### 380
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Further relief for individuals for losses in early years of trade
##### 381
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provisions supplementary to sections 380 and 381
##### 382
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Extension of right of set-off to capital allowances
##### 383
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restrictions on right of set-off
##### 384
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward against subsequent profits
##### 385
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward where business transferred to a company
##### 386
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-forward as losses of amounts taxed under section 350
##### 387
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Carry-back of terminal losses
##### 388
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions relating to carry-back of terminal losses
##### 389
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of interest as a loss for purposes of carry-forward and carry-back
##### 390
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses from trade etc. carried on abroad
##### 391
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Case VI losses
#### Case VI losses
##### 392
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — LOSS RELIEF: CORPORATION TAX
### Trade etc. losses
#### Losses other than terminal losses
##### 393
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Terminal losses
##### 394
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Leasing contracts and company reconstructions
##### 395
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Case VI losses
#### Case VI losses
##### 396
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — LOSS RELIEF: MISCELLANEOUS PROVISIONS
#### Restriction of relief in case of farming and market gardening
##### 397
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transactions in deposits with and without certificates or in debts
##### 398
Where a company sustains a loss on the exercise or disposal of a right to receive any amount, being a right to which section 56(2) . . . applies, in a case where—
- (a) if a profit had arisen from that exercise or disposal, that profit would have been chargeable to corporation tax by virtue of section 56(2) . . . , and
- (b) the company is chargeable to corporation tax under Part 5 of CTA 2009 (loan relationships) in respect of interest payable on that amount,
then the amount of that interest shall be included in the amounts against which the amount of its loss may be set off under section 91 of CTA 2010.
#### Dealings in commodity futures etc: withdrawal of loss relief
##### 399
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Write-off of government investment
##### 400
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for pre-trading expenditure
##### 401
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — GROUP RELIEF
#### Surrender of relief between members of groups and consortia
##### 402
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses etc. which may be surrendered by way of group relief
##### 403
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Limitation of group relief in relation to certain dual resident companies
##### 404
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims relating to losses etc. of members of both group and consortium
##### 405
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims relating to losses etc. of consortium company or group member
##### 406
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relationship between group relief and other relief
##### 407
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Corresponding accounting periods
##### 408
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies joining or leaving group or consortium
##### 409
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Arrangements for transfer of company to another group or consortium
##### 410
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exclusion of double allowances
##### 411
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Claims and adjustments
##### 412
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Chapter IV
##### 413
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## PART XI — CLOSE COMPANIES
### CHAPTER I — INTERPRETATIVE PROVISIONS
#### Close companies
##### 414
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Certain quoted companies not to be close companies
##### 415
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “associated company” and “control”
##### 416
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “participator”, “associate”, “director” and “loan creditor”
##### 417
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Additional matters to be treated as distributions
#### “Distribution” to include certain expenses of close companies
##### 418
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — CHARGES TO TAX IN CONNECTION WITH LOANS
#### Loans to participators etc
##### 419
- (1) Subject to the following provisions of this section and section 420, where a close company, otherwise than in the ordinary course of a business carried on by it which includes the lending of money, makes any loan or advances any money to an individual who is a participator in the company or an associate of a participator, there shall be assessed on and recoverable from the company, as if it were an amount of corporation tax chargeable on the company for the accounting period in which the loan or advance is made, an amount equal to 25 per cent. of the amount of the loan or advance.
- (2) For the purposes of this section the cases in which a close company is to be regarded as making a loan to any person include a case where—
- (a) that person incurs a debt to the close company; or
- (b) a debt due from that person to a third party is assigned to the close company;
and then the close company shall be regarded as making a loan of an amount equal to the debt.
- (3) Tax due by virtue of this section in relation to any loan or advance shall be due and payable in accordance with section 59D of the Management Act on the day following the expiry of nine months from the end of the accounting period in which the loan or advance was made.
- (4) Where a close company has made a loan or advance which gave rise to a charge to tax on the company under subsection (1) above and
- (a) the loan or advance or any part of it is repaid to the company,or
- (b) the whole or part of the debt in respect of the loan or advance is released or written off,
relief shall be given from that tax, or a proportionate part of it . . . .
- (4A) Where
- (a) the repayment of the whole or any part of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance, or
- (b) the release or writing off of the whole or any part of the debt in respect of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance,
relief in respect of the repayment , release or writing off shall not be given under subsection (4) above at any time before the expiry of nine months from the end of the accounting period in which the repayment , release or writing off occurred.
- (4B) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in return) applies to a claim for relief under subsection (4) above unless—
- (a) the claim is included (by amendment or otherwise) in the return for the period in which the loan or advance was made, and
- (b) the relief may be given at the time the claim is made.
- (5) Where, under arrangements made by any person otherwise than in the ordinary course of a business carried on by him—
- (a) a close company makes a loan or advance which, apart from this subsection, does not give rise to any charge on the company under subsection (1) above, and
- (b) some person other than the close company makes a payment or transfers property to, or releases or satisfies (in whole or in part) a liability of, an individual who is a participator in the company or an associate of a participator,
then, unless in respect of the matter referred to in paragraph (b) above there falls to be included in the total income of the participator or associate an amount not less than the loan or advance, this section shall apply as if the loan or advance had been made to him.
- (6) In subsections (1) and (5)(b) above the references to an individual shall apply also to a company receiving the loan or advance in a fiduciary or representative capacity . . . .
- (7) For the purposes of this section any participator in a company which controls another company shall be treated as being also a participator in that other company.
#### Exceptions from section 419
##### 420
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#### Taxation of borrower when loan under section 419 released etc
##### 421
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#### Extension of section 419 to loans by companies controlled by close companies
##### 422
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### CHAPTER III — APPORTIONMENT OF UNDISTRIBUTED INCOME ETC.
#### Apportionment of certain income, deductions and interest
##### 423
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exclusions from section 423
##### 424
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Manner of apportionment
##### 425
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charge to income tax where apportionment is to an individual
##### 426
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction of charge under section 426 in certain cases
##### 427
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#### Increase of apportioned sum etc. by reference to ACT
##### 428
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#### Payment and collection of income tax
##### 429
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#### Consequences of apportionment: ACT
##### 430
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## PART XII — SPECIAL CLASSES OF COMPANIES AND BUSINESSES
### CHAPTER I — INSURANCE COMPANIES, UNDERWRITERS AND CAPITAL REDEMPTION BUSINESS
### Insurance companies: general
#### Interpretative provisions relating to insurance companies
##### 431
- (1) This section has effect for the interpretation of the life assurance provisions of the Corporation Tax Acts.
- (2) Unless the context otherwise requires—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*basic life assurance and general annuity business*” has the meaning given by section 431F;
- “*brought into account*” has the meaning given by section 83A of the Finance Act 1989;
- “*child trust fund business*” has the meaning given by section 431BA;
- “*closing*” and “*opening*”, in relation to a period of account, refer respectively to the position at the end and at the beginning of the period and, in relation to an accounting period, refer respectively to the position at the end and at the beginning of the period of account in which the accounting period falls;
- “*closing liabilities*” includes liabilities assumed at the end of the period of account concerned in consequence of the declaration of reversionary bonuses or a reduction in premiums;
- “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and “contract of long-term insurance” means any contract which falls within Part II of Schedule 1 to that Order;
- “*deposit back arrangements*” means arrangements by which an amount is deposited by the reinsurer under a contract of reinsurance with the cedant;
- “*fair value*”, in relation to assets, means the amount which would be obtained from an independent person purchasing them or, if the assets are money, its amount;
- “*foreign business assets*”, in relation to an insurance company, means assets, other than linked assets, which either—are shown in the records of the company as being primarily attributable to liabilities of the company's foreign business, orare attributable, under the law of a country or territory outside the United Kingdom, to a permanent establishment of the company in that country or territory through which it carries on foreign business;and for this purpose “*foreign business*” means overseas life assurance business or life reinsurance business to the extent that it consists of the reinsurance of overseas life assurance business;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*free assets amount*”, in relation to an insurance company, means the excess of the value of the assets of the company's long-term business , other than any structural assets (within the meaning of section 83XA of the Finance Act 1989), over the aggregate of —the value of the liabilities of that business,any money debts (within the meaning of Part 5 of CTA 2009 (see section 303 of that Act)) of the company not within paragraph (a) above which are owed in respect of that business, andthe amount of the shareholders' excess assets within the meaning given by section 432A(8)(b));
- “*General Prudential Sourcebook*” means the General Prudential Sourcebook made by the Financial Services Authority under the Financial Services and Markets Act 2000 ;
- “*gross roll-up business*” has the meaning given by section 431EA;
- “*the I minus E basis*” means the basis under which a company carrying on life assurance business is charged to tax on the relevant profits (within the meaning of section 88(3) of the Finance Act 1989) of that business otherwise than under section 35 of CTA 2009 (charge on trade profits);
- “*immediate needs annuities business*” means business which consists of the effecting or carrying out of immediate needs annuities (within the meaning of section 725 of ITTOIA 2005);
- “*individual savings account business*” has the meaning given by section 431BB;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*insurance business transfer scheme*” means—a scheme falling within section 105 of the Financial Services and Markets Act 2000, including an excluded scheme falling within Case 2, 3 , 4 or 5 of subsection (3) of that section, ora scheme which would fall within that section but for subsection (1)(b) of that section;
- “insurance company” means—a person (other than a friendly society) who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, oran EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act or a firm qualifying for authorisation under Schedule 4 to that Act which—carries on business which consists of the effecting or carrying out of contracts of insurance, andcarries on that business through a branch or agency in the United Kingdom,but does not include an insurance special purpose vehicle;
- “*the Insurance Prudential Sourcebook*” means the Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- “*insurance special purpose vehicle*” means any undertaking which assumes risks from insurance or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issue or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the reinsurance obligations of the undertaking;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*internal linked fund*”, in relation to an insurance company, means an account—to which linked assets are appropriated by the company, andwhich may be divided into units the value of which is determined by the company by reference to the value of those assets;
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- “*liabilities*”, in relation to an insurance company, means—the mathematical reserves of the company as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook, andliabilities of the company (whose value falls to be determined in accordance with section 1.3 of the General Prudential Sourcebook) which arise from deposit back arrangements;. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*life assurance business*” means business which—consists of the effecting or carrying out of contracts of insurance which fall within paragraph I, II, III or VII(b) of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, oris capital redemption business,other than immediate needs annuities business;
- “*the life assurance provisions of the Corporation Tax Acts*” means—the provisions of this Chapter so far as relating to life assurance business, companies carrying on such business and friendly societies, andany other provisions of the Corporation Tax Acts making separate provision by reference to whether or not the business of a company is or includes life assurance business or any category of business that includes life assurance business;
- “*life assurance trade profits provisions*” means the provisions applicable for the purposes of the taxation under section 35 of CTA 2009 (charge on trade profits) of the profits of life assurance business carried on by an insurance company;
- “*life reinsurance business*” has the meaning given by section 431C;
- “*linked assets*”, and related expressions, shall be construed in accordance with section 432ZA;
- “long-term business” means business which consists of the effecting or carrying out of contracts of long-term insurance;
- “*long-term insurance fund*” means the fund maintained by an insurance company in respect of its long-term business . . . ;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*net value*”, in relation to any assets, means the excess of the value of the assets over the value of money debts (within the meaning of Part 5 of CTA 2009: see section 303 of that Act) attributable to an internal linked fund which are not owed in respect of liabilities;
- “*non-profit company*”, in relation to a period of account, means a company carrying on long-term business where, at the end of the period—none of the liabilities of that business, ornone but an insignificant proportion of those liabilities,are with-profits liabilities;
- “*non-profit fund*” means a fund that is not a with-profits fund;
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- “*overseas life assurance business*” has the meaning given by section 431D;
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- “*overseas life insurance company*” means an insurance company not resident in the United Kingdom but carrying on life assurance business through a branch or agency in the United Kingdom; . . .
- “*pension business*” has the meaning given by section 431B;
- “*periodical return*”, in relation to an insurance company, means a return deposited with the Financial Services Authority under section 9.6 of the Prudential Sourcebook (Insurers)(and does not include the Forms mentioned in Rule 9.3(5)).
- “*period of account*” means the period covered by a periodical return;
- “*PHI business*” means long-term business other than life assurance business (including the reinsurance of such long-term business);
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “the Prudential Sourcebook (Insurers)” means the Interim Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;
- “*reinsurance*” includes retrocession;
- “*shareholders' excess assets*” has the meaning given by section 432A(8)(b));
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*value*”, in relation to an asset of an insurance company, means the value of the asset as determined in accordance with section 1.3 of the General Prudential Sourcebook, as read with section 2.1 of the Insurance Prudential Sourcebook;
- “*with-profits fund*” has the meaning given by the Prudential Sourcebook (Insurers);
- “*with-profits liabilities*” means liabilities in respect of policies or contracts under which the policy holders or annuitants are eligible to participate in surplus;
- (2YA) Where an insurance company becomes an insurance special purpose vehicle otherwise than on the last day of a period of account, it shall be treated as an insurance special purpose vehicle from the beginning of that period.
- (2YB) “*BLAGAB profits*”, in relation to an accounting period of an insurance company, means the company's BLAGAB income and gains for the period reduced (but not below nil) by the company's BLAGAB deductions for the period.
- (2YC) “*BLAGAB income and gains*”, in relation to an accounting period of an insurance company, means the aggregate of—
- (a) income chargeable for the period . . . so far as referable (in accordance with section 432A) to the company's basic life assurance and general annuity business, and
- (b) chargeable gains so far as so referable accruing to the company in the period, but (subject to section 210A of the 1992 Act) after deducting—
- (i) any allowable losses so referable and so accruing, and
- (ii) so far as they have not been allowed as a deduction from chargeable gains in any previous accounting period, any allowable losses so referable previously accruing to the company.
- (2YD) “*BLAGAB deductions*”, in relation to an accounting period of an insurance company, means the aggregate of—
- (a) amounts falling in respect of any non-trading deficits on the company's loan relationships to be brought into account in the period in accordance with sections 387 to 391 of CTA 2009, and
- (b) the expenses deduction given by Step 8 in section 76(7) for the period.
- (2ZA) Subsections (2ZB) and (2ZC) below apply where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2ZB) If the transfer takes place otherwise than on the last day of a period of account of the transferor, references to—
- (a) opening liabilities of the transferor,
- (b) opening values or net values of assets of the transferor, . . . or
- (c) the opening amount of the free assets amount of the transferor, . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion A/C.
- (2ZC) If the transfer takes place otherwise than on the first day of a period of account of the transferee, references to—
- (a) closing liabilities of the transferee,
- (b) closing values or net values of assets of the transferee, . . . or
- (c) the closing amount of the free assets amount of the transferee, . . .
- (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
for the period of account, so far as relating to the business transferred, are to the part of those liabilities, values or amounts which bears to the whole the proportion B/C.
- (2ZD) For the purposes of subsection (2ZC) above—
- (a) closing liabilities of the transferee are to be taken not to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferor with the transferee, but
- (b) closing liabilities of the transferee are to be taken to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferee with the transferor if the business transferred consists of or includes that reinsurance business.
- (2ZE) In subsections (2ZB) and (2ZC) above—
- A is the number of days in the period beginning with the period of account and ending with the day of the transfer,
- B is the number of days in the period beginning with the day of the transfer and ending with the period of account, and
- C is one-half of the number of days in the period of account.
- (2ZF) In this Chapter “*capital redemption business*” means any business of a company carrying on insurance business in so far as it consists of the effecting on the basis of actuarial calculations, and the carrying out, of contracts under which, in return for one or more fixed payments, a sum or series of sums of a specified amount become payable at a future time or over a period.
- (2ZG) The Treasury may by order amend the definition of “insurance business transfer scheme” given by subsection (2) above where it is expedient to do so in consequence of any amendment of section 105 of the Financial Services and Markets Act 2000.
- (2ZH) The power conferred by subsection (2ZG) above includes power to make incidental, supplementary, consequential or transitional provisions and savings (including provision amending any provision of the Corporation Tax Acts relating to insurance companies).
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Separation of different classes of business
##### 432
- (1) Where an insurance company carries on life assurance business in conjunction with insurance business of any other category, the life assurance business shall, for the purposes of the Corporation Tax Acts, be treated as a separate business from any other category of business carried on by the company.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Profits reserved for policy holders and annuitants
##### 433
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#### Franked investment income etc
##### 434
- (1) Where an insurance company makes a payment representative of a distribution made by a company resident in the United Kingdom in respect of an asset of its long-term insurance fund, the payment is to be taken into account in computing its profits in accordance with the life assurance trade profits provisions unless the amount taken into account in accordance with section 83(2)(a) of the Finance Act 1989 includes the amount of the payment.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) So much of the policy holders' share of the franked investment income from investments of a company’s long-term insurance fund as is referable to its life assurance business shall be left out of account in determining, under section 32(1) of CTA 2010 (which relates to relief for small companies), the franked investment income forming part of the company’s profits for the purposes of Part 3 of that Act.
- (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) *Subject to subsection* (5)*below, the specified part shall be, in the case of any unrelieved income, the same fraction of it as the fraction which, on a computation of the profits of the company in respect of its life assurance business in accordance with the provisions applicable to Case* I*of Schedule D* (*whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods*),*would be connoted by the words in section* 433 “*such part of those profits as belongs or is allocated to, or is reserved for, or expended on behalf of, policy holders or annuitants*”.
- (5) *If the income exceeds the profits as computed in accordance with the provisions applicable to Case* I*of Schedule D other than section 433, the specified part shall be that fraction of the income so far as not exceeding the profits, together with the amount of the excess*.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) For the purposes of this section—
- (a) “*the policy holders’ share*” of any franked investment income is so much of that income as is not the shareholders’ share within the meaning of section 89 of the Finance Act 1989, . . .
- (aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ab) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ac) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation of gains reserved for policy holders and annuitants
##### 435
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#### Annuity business and pension business: separate charge on profits
##### 436
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#### General annuity business
##### 437
- (1A) In the computation under the I minus E basis of the relevant profits (within the meaning of section 88(1) of the Finance Act 1989) of an insurance company for any accounting period, new annuities paid by the company in that period shall be brought into account by treating an amount equal to the income limit for that period as expenses payable which fall to be brought into account for that period at Step 3 in section 76(7).
- (1C) For the purposes of this section (but subject to subsections (1CA) to (1CD) below)—
- (a) “*new annuity*” means any annuity, so far as paid under a contract made by an insurance company in an accounting period beginning on or after 1st January 1992 and so far as referable to the company’s basic life assurance and general annuity business;
- (b) “*the income limit*” for an accounting period of an insurance company is the difference between—
- (i) the total amount of the new annuities paid by the company in that accounting period; and
- (ii) the total of the . . . amounts exempt under section 717 of ITTOIA 2005 contained in the new annuities so paid; . . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .and
- (d) the amounts exempt under section 717 of ITTOIA 2005 are so much of the payments under the new annuities as would be within the exemption in subsection (1) of that section if—
- (i) section 718 of that Act were omitted, and
- (ii) that exemption were an exemption applying in relation to companies as well as individuals.
- (1CA) Where a new annuity (“*the actual annuity*”) is a steep-reduction annuity, the income limit for an accounting period of the company paying the annuity shall be computed for the purposes of this section as if—
- (a) the contract providing for the actual annuity provided instead for the annuities identified by subsections (1CB) and (1CC) below; and
- (b) the consideration for each of those annuities were to be determined by the making of a just and reasonable apportionment of the consideration for the actual annuity.
- (1CB) The annuities mentioned in subsection (1CA)(a) above are—
- (a) an annuity the payments in respect of which are confined to the payments in respect of the actual annuity that fall to be made before the earliest time for the making in respect of the actual annuity of a reduced payment such as is mentioned in section 437A(1)(c); and
- (b) subject to subsection (1CC) below, an annuity the payments in respect of which are all the payments in respect of the actual annuity other than those mentioned in paragraph (a) above.
- (1CC) Where an annuity identified by paragraph (b) of subsection (1CB) above (“*the later annuity*”) would itself be a steep-reduction annuity, the annuities mentioned in subsection (1CA)(a) above—
- (a) shall not include the later annuity; but
- (b) shall include, instead, the annuities which would be identified by subsection (1CB) above (with as many further applications of this subsection as may be necessary for securing that none of the annuities mentioned in subsection (1CA)(a) above is a steep-reduction annuity) if references in that subsection to the actual annuity were references to the later annuity.
- (1CD) Subsections (1CA) to (1CC) above shall be construed in accordance with section 437A.
- (1D) In any case where—
- (a) a payment in respect of an annuity is made by an insurance company under a group annuity contract made in an accounting period beginning before 1st January 1992,
- (b) the company’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the company’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall be treated for the purposes of this section, other than this subsection, as if the group annuity contract had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1E) In any case where—
- (a) a payment in respect of an annuity is made by a reinsurer under a reinsurance treaty made in an accounting period beginning before 1st January 1992,
- (b) the reinsurer’s liabilities first include an amount in respect of that annuity in an accounting period beginning on or after that date, and
- (c) the reinsurer’s liability in respect of that annuity is referable to its basic life assurance and general annuity business,
the payment shall, as respects the reinsurer, be treated for the purposes of this section, other than this subsection, as if the reinsurance treaty had been made in an accounting period beginning on or after 1st January 1992 (and, accordingly, as payment of a new annuity).
- (1F) In this section—
- “*group annuity contract*” means a contract between an insurance company and some other person under which the company undertakes to become liable to pay annuities to or in respect of such persons as may subsequently be specified or otherwise ascertained under or in accordance with the contract (whether or not annuities under the contract are also payable to or in respect of persons who are specified or ascertained at the time the contract is made);
- “*reinsurance treaty*” means a contract under which one insurance company is obliged to cede, and another (in this section referred to as a “*reinsurer*”) to accept, the whole or part of a risk of a class or description to which the contract relates.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Pension business: exemption from tax
##### 438
- (1) Exemption from corporation tax shall be allowed in respect of income from assets solely linked to pension business.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restricted government securities
##### 439
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Identification or exchange of long term assets
##### 440
- (1) If at any time an asset (or a part of an asset) held by an insurance company ceases to be within one of the categories set out in subsection (4) below and comes within another of those categories, the company shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) for a consideration equal to its fair value at that time.
- (2) Where—
- (a) an asset is acquired by a company as a result of an insurance business transfer scheme which has effect to transfer long-term business from any person (“the transferor”) to the company, and
- (b) the asset (or part of it) is within one of the categories set out in subsection (4) below immediately before the acquisition and is within another of those categories immediately afterwards,
the transferor shall for the purposes of corporation tax be deemed to have disposed of and immediately re-acquired the asset (or part) immediately before the acquisition for a consideration equal to its fair value at that time.
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Where, apart from this subsection, section 171 or 173 the 1992 Act (transfers within a group) would apply to a disposal or acquisition by an insurance company of an asset (or part of an asset) which, immediately before the disposal or (as the case may be) immediately after the acquisition, is within one of the categories set out in paragraphs (a), (d) and (e) of subsection (4) below, that section shall not apply to the disposal or acquisition.
- (4) The categories referred to in subsections (1) to (3) above are—
- (a) assets which are linked solely to gross roll-up business or are foreign business assets;
- (d) assets linked solely to basic life assurance and general annuity business;
- (e) assets of the long-term insurance fund not within either of the preceding paragraphs;
- (f) other assets.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) In a case where the profits of a company’s life assurance business are charged to tax under section 35 of CTA 2009 (charge on trade profits) this section has effect with the modification specified in section 440B(3).
#### Foreign life assurance funds
##### 441
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Overseas business of U.K. companies
##### 442
- (1) Subsections (2) and (3) below apply where a company resident in the United Kingdom carries on insurance business outside the United Kingdom through a permanent establishment and—
- (a) that business, or part of it, together with the whole assets of the company used for the purposes of that business or part (or together with the whole of those assets other than cash), is transferred to a company not resident in the United Kingdom;
- (b) the business or part is so transferred wholly or partly in exchange for shares, or for shares and loan stock, issued by the transferee company to the transferor company; and
- (c) the shares so issued, either alone or taken together with any other shares in the transferee company already held by the transferor company, amount in all to not less than one quarter of the ordinary share capital of the transferee company.
- (2) In making any computation in accordance with the provisions applicable for the purposes of section 35 of CTA 2009 (charge on trade profits) of the profits or losses of the transferor company for the accounting period in which the transfer occurs, there shall be disregarded any profit or loss in respect of any asset transferred which, apart from this subsection, would fall to be taken into account in making that computation.
- (3) Where by virtue of subsection (2) above any profit or loss is disregarded in making any computation . . . the profit or loss shall be treated for the purposes of the 1992 Act as a chargeable gain or allowable loss accruing to the transferor company on the transfer.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life policies carrying rights not in money
##### 443
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life policies issued before 5th August 1965
##### 444
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Provisions applying only to overseas life insurance companies
#### Charge to tax on investment income
##### 445
#### Annuity business
##### 446
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Set-off of income tax and tax credits against corporation tax
##### 447
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying distributions and tax credits
##### 448
#### Double taxation agreements
##### 449
### Underwriters
#### Assessment, set-off of losses and reinsurance
##### 450
#### Regulations
##### 451
#### Special reserve funds
##### 452
#### Payments into premiums trust fund on account of losses
##### 453
#### Income tax consequences on payments into and out of special reserve fund
##### 454
#### Income tax consequences on death of underwriter
##### 455
#### Unearned income, variation of arrangements and cancellation of approval etc
##### 456
#### Interpretation of sections 450 to 456
##### 457
### Capital redemption business
#### Capital redemption business
##### 458
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER II — FRIENDLY SOCIETIES, TRADE UNIONS AND EMPLOYERS’ ASSOCIATIONS
### Unregistered friendly societies
#### Exemption from tax
##### 459
An unregistered friendly society (that is, a friendly society which is neither an incorporated friendly society nor a registered friendly society) whose income does not exceed £160 a year shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains).
### Registered friendly societies
#### Exemption from tax in respect of life or endowment business
##### 460
- (1) Subject to subsection (2) below, a friendly society shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits arising from life or endowment business.
- (2) Subsection (1) above—
- (a) shall not, subject to section 462, exempt a registered friendly society registered after 31st December 1957 which at any time in the period of three months ending 3rd May 1966 entered into any transaction in return for a single premium, being a transaction forming part of its life or endowment business;
- (aa) shall not, subject to section 462, exempt an incorporated friendly society which, before its incorporation, was a registered friendly society such as is mentioned in paragraph (a) above;
- (b) shall not apply to profits arising from gross roll-up business;
- (c) shall not apply to profits arising from life or endowment business consisting—
- (zai) where the profits relate to contracts made on or after the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £270 or of the granting of annuities of annual amounts exceeding £156;
- (ai) where the profits relate to contracts made on or after the day on which the Finance Act 1991 was passed but before the day on which the Finance Act 1995 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £200 or of the granting of annuities of annual amounts exceeding £156;
- (i) where the profits relate to contracts made after 31st August 1990 but before the day on which the Finance Act 1991 was passed, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £150 or of the granting of annuities of annual amounts exceeding £156;
- (ia) where the profits relate to contracts made after 31st August 1987 but before 1st September 1990, of the assurance of gross sums under contracts under which the total premiums payable in any period of 12 months exceed £100 or of the granting of annuities of annual amounts exceeding £156.
- (ii) where the profits relate to contracts made after 13th March 1984 but before 1st September 1987, of the assurance of gross sums exceeding £750 or of the granting of annuities of annual amounts exceeding £156;
- (iii) where the profits relate to contracts made before 14th March 1984, of the assurance of gross sums exceeding £500 or of the granting of annuities of annual amounts exceeding £104;
- (ca) shall not apply to so much of the profits arising from life or endowment business as is attributable to contracts for the assurance of gross sums made on or after 20th March 1991 and expressed at the outset not to be made in the course of tax exempt life or endowment business;and
- (cb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) as respects other life or endowment business (“tax exempt life or endowment business”), has effect subject to the following provisions of this Chapter.
- (3) In determining for the purposes of subsection (2)(c)(zai), (ai), (i) or (ia) above the total premiums payable in any period of 12 months—
- (a) where those premiums are payable more frequently than annually, there shall be disregarded an amount equal to 10 per cent. of those premiums; and
- (b) so much of any premium as is charged on the ground that an exceptional risk of death or disability is involved shall be disregarded;
and in applying the limit of £156 in subsection (2)(c)(zai), (ai), (i) or (ia) above, any bonus or addition declared upon an annuity shall be disregarded.
- (4) In applying the limits referred to in subsection (2)(c)(ii) and (iii) above, any bonus or addition which either is declared upon an assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments shall be disregarded.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under tax exempt life or endowment business made after 31st August 1987 and before the day on which the the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (2)(c) above, be treated, in relation to any profits relating to it as varied, as made at the time of the variation.
- (5) A friendly society is within this subsection if its rules make no provision for it to carry on life or endowment business consisting of the assurance of gross sums exceeding £2,000 or of the granting of annuities of annual amounts exceeding £416.
- (6) In the case of a friendly society within subsection (5) above—
- (a) subsection (2)(c)(iii) above shall have effect with the substitution of references to £2,000 and £416 respectively for the references to £500 and £104; and
- (b) references in this Chapter to tax exempt life or endowment business shall be construed accordingly.
- (7) Where at any time a friendly society within subsection (5) above amends its rules so as to cease to be within that subsection, any part of its 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,
shall thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (8) Where at any time a friendly society not within subsection (5) above amends its rules so as to bring itself within that subsection, any part of its life or endowment business consisting of business which—
- (a) related to contracts made before that time; and
- (b) immediately before that time was not tax exempt life or endowment business,
shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (9) Where at any time a friendly society not within subsection (5) above acquires by way of transfer of engagements or amalgamation from another 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 thereafter continue to be tax exempt life or endowment business for the purposes of this Chapter.
- (10) Where at any time a friendly society within subsection (5) above acquires by way of transfer of engagements or amalgamation from another 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 not tax exempt life or endowment business,
that business shall thereafter continue not to be tax exempt life or endowment business for the purposes of this Chapter.
- (10A) Where at any time an insurance business transfer scheme has effect to transfer to a friendly society long-term business, any life or endowment business which relates to contracts included in the transfer , other than any to which subsection (11) or (12) below applied immediately before the transfer had effect, shall not thereafter be tax exempt life or endowment business for the purposes of this Chapter.
- (10B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) Where at any time a friendly society ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, any part of its 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,
shall continue to be exempt from corporation tax (whether on income or chargeable gains) on profits arising from it.
- (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.
- (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.
#### Taxation in respect of other business
##### 461
- (1) Subject to the following provisions of this section, a registered friendly society other than a society to which subsection (2) below applies shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) This subsection applies to any society registered after 31st May 1973 unless—
- (a) its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board; or
- (b) it was registered before 27th March 1974 and its rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as the Board may authorise for the purposes of this section;
and also applies to any society registered before 1st June 1973 with respect to which a direction under subsection (7) below is in force.
- (3) If a society to which subsection (2) above applies, after 26th March 1974 or such later date as may be specified in a direction under this section, makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society after that date, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a registered friendly society—
- (a) at any time ceases . . . by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act; and
- (b) immediately before that time was exempt from . . . corporation tax on profits arising from any business carried on by it other than life or endowment business,
the company into which the society is converted shall be so exempt on its profits arising from any part of that business which relates to contracts made before that time so long as there is no increase in the scale of benefits which it undertakes to provide in the course of carrying on that part of its business.
- (4A) Where—
- (a) at any time an insurance company acquires by way of transfer of engagements from a registered friendly society any business other than life or endowment business, and
- (b) immediately before that time the society was exempt from corporation tax on profits arising from that business,
the insurance company shall be exempt from corporation tax on its profits arising from any part of that business which relates to contracts made before that time.
- (4B) But if during an accounting period of the insurance company there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on any such part of that business, the company shall not be exempt from corporation tax by virtue of subsection (4A) above for that or any subsequent accounting period.
- (5) For the purposes of the Corporation Tax Acts any part of a company’s business in respect of the profits from which the company is exempt by virtue of subsection (4) or (4A) above shall be treated as a separate business from any other business carried on by the company.
- (6) If—
- (a) a friendly society registered before 1st June 1973 begins after 26th March 1974 to carry on business other than life or endowment business or, in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character; and
- (b) it appears to the Board, having regard to the restrictions imposed by this section on friendly societies registered later, that for the protection of the revenue it is expedient to do so;
the Board may give a direction to the society under subsection (7) below.
- (7) A direction under this subsection is that (and has the effect that) the society to which it is given is to be treated for the purposes of this Act as a society registered after 31st May 1973 with respect to business carried on after the date of the direction.
- (8) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction . . . on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (6)(a) above; or
- (b) the direction is not necessary for the protection of the revenue.
- (9) If a registered friendly society in respect of which a direction is in force under subsection (7) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a society registered after 31st May 1973.
- (10) For the purposes of this section a registered friendly society formed on the amalgamation of two or more friendly societies shall be treated as registered before 1st June 1973 if at the time of the amalgamation subsection (2) above did not apply to any of the societies amalgamated, but otherwise shall be treated as registered at that time.
- (11) For the purposes of this section and section 461C—
- (a) any group of persons which was approved for the purposes of this section (as mentioned in subsection (2)(a) above) immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date;
- (b) any greater amount which was authorised for the purposes of this section (as mentioned in subsection (2)(b) above) immediately before 1st December 2001 shall be treated as having been authorised for the purposes of this section by the Board on that date; and
- (c) where a direction that subsection (2) above applies to a society was in force immediately before 1st December 2001, a direction in relation to that society shall be treated as having been made under subsection (7) above by the Board on that date.
- (12) 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 (4) or (4A) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (13) Regulations under subsection (12) 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.
#### Conditions for tax exempt business
##### 462
- (1) Subject to subsection (2) below, section 460 does not afford any exemption from corporation tax in relation to so much of the profits arising to a friendly society or insurance company from any business as is attributable to a policy which—
- (a) is not a qualifying policy (by virtue of sub-paragraph (2) of paragraph 6 of Schedule 15) and is not an excluded policy, and
- (b) would not be a qualifying policy (by virtue of that sub-paragraph) if all excluded policies were left out of account.
- (1A) For the purposes of subsection (1) above a policy is an excluded policy if—
- (a) it is a policy held otherwise than with the friendly society or insurance company, or
- (b) the person who has the contract effecting the policy acquired the rights under it on an assignment (or, in Scotland, assignation) otherwise than for money or money's worth.
- (2) Section 460(2)(a) or (aa) and subsection (1) above shall not withdraw exemption in relation to profits arising from any part of a business relating to contracts made not later than 3rd May 1966.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life or endowment business: application of the Corporation Tax Acts
##### 463
- (1) Subject to section 460(1), the Corporation Tax Acts shall apply to long-term business carried on by friendly societies in the same way as they apply to mutual life assurance business (or other long-term business) carried on by insurance companies, so however that the Treasury may by regulations provide that those Acts as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations, and those regulations may in particular require any part of any business to be treated as a separate business.
- (2) The provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company shall apply in the same way—
- (a) on the transfer of the whole or part of the business of a friendly society to another friendly society (and on the amalgamation of friendly societies), and
- (b) on the transfer of the whole or part of the business of a friendly society to a company which is not a friendly society (and on the conversion of a friendly society into such a company),
so however that the Treasury may by regulations provide that those provisions as so applied shall have effect subject to such modifications and exceptions as may be prescribed by the regulations.
- (3) The Treasury may by regulations provide that the provisions of the Corporation Tax Acts which apply on the transfer of the whole or part of the long-term business of an insurance company to another company shall have effect where the transferee is a friendly society subject to such modifications and exceptions as may be prescribed by the regulations.
- (4) Regulations under this section may make different provision for different cases and may include provision having retrospective effect.
#### Maximum benefits payable to members
##### 464
- (1) Subject to subsections (2) and (3) below, a person is not entitled to have at any time outstanding contracts with any one or more friendly societies, registered branches or insurance companies which (taking them all together) are for the assurance of—
- (a) more than £750 by way of gross sum under business which is afforded exemption from corporation tax by section 460, or
- (b) more than £156 by way of annuity under such business.
In any case where the member’s outstanding contracts were all made before 14th March 1984 this subsection shall have effect with the substitution for “£750” and “£156” of “ £2,000 ” and “ £416 ” respectively.
- (2) Subsection (1)(a) above shall not apply as respects sums assured under contracts made after 31st August 1987.
- (3) With respect to contracts for the assurance of gross sums under business which is afforded exemption from corporation tax by section 460, a person is not entitled to have outstanding at any time with any one or more friendly societies, registered branches or insurance companies—
- (zza) contracts under which the total premiums payable in any period of 12 months exceed £270; or
- (za) contracts made before the day on which the Finance Act 1995 was passed and under which the total premiums payable in any period of 12 months exceed £200; or
- (a) contracts made before the day on which the Finance Act 1991 was passed and under which the total premiums payable in any period of 12 months exceed £150; or
- (b) contracts made before 1st September 1990 under which the total premiums payable in any period of 12 months exceed £100,
unless all those contracts were made before 1st September 1987.
- (4) In applying the limits in subsection (3) above, the premiums under any contract for an annuity which was made before 1st June 1984 by a new society shall be brought into account as if the contract were for the assurance of a gross sum.
- (4A) Subsection (4B) below applies to contracts for the assurance of gross sums under business which is afforded exemption from corporation tax by section 460 if they are made after 31st August 1987 and before the day on which the Finance Act 1995 was passed.
- (4B) Where the amount payable by way of premium under a contract to which this subsection applies is increased by virtue of a variation made—
- (a) in the period beginning with 25th July 1991 and ending with 31st July 1992, or
- (b) in the period beginning with the day on which the Finance Act 1995 was passed and ending with 31st March 1996,
the contract shall, for the purposes of subsection (3) above, be treated, in relation to times when the contract has effect as varied, as made at the time of the variation.
- (5) In applying the limits in this section there shall be disregarded—
- (a) any bonus or addition which either is declared upon assurance of a gross sum or annuity or accrues upon such an assurance by reference to an increase in the value of any investments;
- (b) any policy of insurance or annuity contract by means of which the benefits to be provided under an occupational pension scheme (within the meaning of section 150(5) of the Finance Act 2004) are secured or any annuity contract which constitutes a registered pension scheme or is issued or held in connection with a registered pension scheme other than such an occupational pension scheme;
- (c) any increase in a benefit under a friendly society contract, as defined in section 6 of the Decimal Currency Act 1969, resulting from the adoption of a scheme prescribed or approved in pursuance of subsection (3) of that section; and
- (d) so far as concerns the total premiums payable in any period of 12 months—
- (i) 10 per cent. of the premiums payable under any contract under which the premiums are payable more frequently than annually; and
- (ii) £10 of the premiums payable under any contract made before 1st September 1987 by a friendly society other than a new society; and
- (iii) so much of any premium as is charged on the ground that an exceptional risk of death is involved.
- (6) In applying the limits in this section in any case where a person has outstanding with one or more societies, branches or companies one or more contracts made after 13th March 1984 and one or more contracts made on or before that date, any contract for an annuity which was made before 1st June 1984 by a new society shall be regarded not only as a contract for the annual amount concerned but also as a contract for the assurance of a gross sum equal to 75 per cent. of the total premiums which would be payable under the contract if it were to run for its full term or, as the case may be, if the member concerned were to die at the age of 75 years.
- (7) A friendly society , registered branch or insurance company may require a person to make and sign a statutory declaration that the total amount assured under outstanding contracts entered into by that person with any one or more friendly societies, registered branches or insurance companies (taken together) does not exceed the limits applicable by virtue of this section and that the total premiums under those contracts do not exceed those limits.
#### Old societies
##### 465
- (1) In this section “*old society*” means a friendly society which is not a new society.
- (2) This section applies if, on or after 19th March 1985, an old society—
- (a) begins to carry on tax exempt life or endowment business; or
- (b) in the opinion of the Board begins to carry on such business on an enlarged scale or of a new character.
- (3) If it appears to the Board, having regard to the restrictions placed on qualifying policies issued by new societies by paragraphs 3(1)(b) . . . and 4(3)(b) of Schedule 15, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the old society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the old society to which it is given is to be treated for the purposes of this Act as a new society with respect to business carried on after the date of the direction.
- (5) An old society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction . . . on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (2) above; or
- (b) that the direction is not necessary for the protection of the revenue.
- (6) If a registered friendly society in respect of which a direction is in force under subsection (4) above becomes an incorporated friendly society, the direction shall continue to have effect, so that the incorporated friendly society shall be treated for the purposes of this Act as a new society.
#### Interpretation of Chapter II
##### 466
- (1) In this Chapter “*life or endowment business*” means, subject to subsections (1A) and (1B) below—
- (a) any life assurance business, and
- (b) any PHI business (as defined in section 431) if—
- (i) the contract is one made before 1 September 1996, or
- (ii) the contract is one made on or after that date and the effecting and carrying out of the business also constitutes business within paragraphs I, II or III of Part II of Schedule 1 to the Financial Services and Markets Act (Regulated Activities) Order 2001.
- (1A) Life or endowment business does not include the issue, in respect of a contract made before 1st September 1996, of a policy affording provision for sickness or other infirmity (whether bodily or mental), unless—
- (a) the policy also affords assurance for a gross sum independent of sickness or other infirmity;
- (b) not less than 60 per cent. of the amount of the premiums is attributable to the provision afforded during sickness or other infirmity; and
- (c) there is no bonus or addition which may be declared or accrue upon the assurance of the gross sum.
- (1B) Life or endowment business does not include the assurance of any annuity the consideration for which consists of sums obtainable on the maturity, or on the surrender, of any other policy of assurance issued by the friendly society, being a policy of assurance forming part of the tax exempt life or endowment business of the friendly society.
- (2) In this Chapter—
- “*friendly society*”, without qualification, means (except in section 459) an incorporated friendly society or a registered friendly society;
- “*gross roll-up business*” shall be construed in accordance with section 431;
- “*incorporated friendly society*” means a society incorporated under the Friendly Societies Act 1992;
- “*insurance company*” shall be construed in accordance with section 431;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*long-term business*” shall be construed in accordance with section 431;
- “*new society*” means—a registered friendly society which was registered after 3rd May 1966 or which was registered in the period of three months ending on that date but which at no time earlier than that date carried on any life or endowment business, oran incorporated friendly society other than one which, before its incorporation, was a registered friendly society not within paragraph (a) above;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*policy*”, in relation to life or endowment business, includes an instrument evidencing a contract to pay an annuity upon human life;
- “*registered branch*” means the same as in the Friendly Societies Act 1992 (and includes any branch that by virtue of section 96(3) of that Act is to be treated as a registered branch);
- “*registered friendly society*” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society);
- . . .
- “*tax exempt life or endowment business*” has, subject to subsections (7) to (10A) of section 460, the meaning given by subsection (2)(d) of that section, that is to say, it means (subject to those subsections) life or endowment business other than business profits arising from which are excluded from subsection (1) of that section by subsection (2)(b) or (c) of that section (read, where appropriate, with subsection (6) of that section);
and references in sections 460 to 465 and this subsection to a friendly society include, in the case of a registered friendly society, references to any branch of that society.
- (2ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) It is hereby declared that for the purposes of this Chapter (except where provision to the contrary is made) a friendly society formed on the amalgamation of two or more friendly societies is to be treated as different from the amalgamated societies.
- (4) A registered friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society;
or, if the amalgamation took place before 19th March 1985, the society was treated as registered not later than 3rd May 1966 by virtue of the proviso to section 337(4) of the 1970 Act.
- (5) An incorporated friendly society formed on the amalgamation of two or more friendly societies shall, for the purposes of this Chapter, be treated as a society which, before its incorporation, was a registered friendly society registered not later than 3rd May 1966 if at the time of the amalgamation—
- (a) all the friendly societies amalgamated were registered friendly societies eligible for the exemption conferred by section 460(1); and
- (b) at least one of them was not a new society.
### Trade unions and employers’ associations
#### Exemption for trade unions and employers' associations
##### 467
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER III — UNIT TRUST SCHEMES, DEALERS IN SECURITIES ETC.
### Unit trust schemes
#### Authorised unit trusts
##### 468
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Other unit trusts
##### 469
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transitional provisions relating to unit trusts
##### 470
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Dealers in securities, banks and insurance businesses
#### Exchange of securities in connection with conversion operations, nationalisation etc
##### 471
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Distribution of securities issued in connection with nationalisation etc
##### 472
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conversion etc. of securities held as circulating capital
##### 473
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of tax-free income
##### 474
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax-free Treasury securities: exclusion of interest on borrowed money
##### 475
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER IV — BUILDING SOCIETIES, BANKS, SAVINGS BANKS, INDUSTRIAL AND PROVIDENT SOCIETIES AND OTHERS
#### Building societies: regulations for payment of tax
##### 476
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Investments becoming or ceasing to be relevant building society investments
##### 477
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Building societies: time for payment of tax
##### 478
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest paid on deposits with banks etc
##### 479
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deposits becoming or ceasing to be composite rate deposits
##### 480
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Deposit-taker”, “deposit” and “relevant deposit”
##### 481
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplementary provisions
##### 482
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Determination of reduced rate for building societies and composite rate for banks etc
##### 483
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) If the order made under section 26 of the Finance Act 1984 in the year 1987-88 is made in pursuance of subsection (4) of that section, that order shall, notwithstanding that that subsection is not re-enacted by this Act, apply for the purposes of sections 476 and 479 for the year 1988-89.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Savings banks: exemption from tax
##### 484
@@ -5074,141 +4996,13 @@
##### 488
- (1) Where a housing association makes a claim in that behalf for any year or part of a year of assessment during which the association was approved for the purposes of this section—
- (a) rent to which the association was entitled from its members for the year or part shall be disregarded for tax purposes; and
- (b) any yearly interest payable by the association for the year or part shall be treated for tax purposes in relation to the association as if there were no interest so payable.
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where the property, or any of the properties, to which any such interest as is mentioned in paragraph (b) of subsection (1) above relates is for any period not subject to a tenancy—
- (a) that paragraph shall not apply in relation to so much of the interest as is attributable to the property not subject to a tenancy;. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Where a claim under subsection (1) above has effect, any adjustment of the liability to tax of . . . the association which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.
- (5) Where a housing association makes a claim in that behalf for an accounting period or part of an accounting period during which it was approved for the purposes of this section, the housing association shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part on the disposal by way of sale of any property which has been or is being occupied by a tenant of the housing association.
- (6) References in this section to the approval of an association shall be construed as references to approval—
- (a) by the Secretary of State in the case of a housing association in Great Britain;
- (b) by the Head of the Department of the Environment for Northern Ireland in the case of a housing association in Northern Ireland;
and an association shall not be approved unless the approving authority is satisfied—
- (i) that the association is, or is deemed to be, duly registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969, and is a housing association within the meaning of the Housing Associations Act 1985 or Article 3 of the Housing (Northern Ireland) Order 1992;
- (ii) that the rules of the association restrict membership to persons who are tenants or prospective tenants of the association, and preclude the granting or assignment (or, in Scotland, the granting or assignation) of tenancies to persons other than members; and
- (iii) that the association satisfies such other requirements as may be prescribed by the Secretary of State as respects Great Britain, or the Head of the Department for Social Development for Northern Ireland as respects Northern Ireland, and will comply with such conditions as may for the time being be so prescribed.
- (7) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the approving authority and shall cease to have effect if revoked.
- (7A) In relation to a housing association which is a registered provider of social housing the Secretary of State may delegate any of his functions under subsections (6) and (7)—
- (a) to the Regulator of Social Housing. . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to such extent and subject to such conditions as he may specify.
- (8) The Secretary of State as respects Great Britain, or the Head of the Department of the Environment for Northern Ireland as respects Northern Ireland, may make regulations for the purpose of carrying out the provisions of this section; and, from the coming into operation of regulations under this subsection prescribing requirements or conditions for the purposes of subsection (6)(iii) above, “prescribed” in subsection (6)(iii) above shall mean prescribed by or under such regulations.
- (9) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.
- (10) Subject to subsection (11) below, no claim shall be made under this section unless during the year or accounting period, or part thereof, to which the claim relates—
- (a) no property belonging to the association making the claim was let otherwise than to a member of the association;
- (b) no property let by the association, and no part of such property, was occupied, whether solely or as joint occupier, by a person not being a member of the association;
- (c) the association making the claim satisfies the conditions specified in subsection (6)(i) and (ii) above and has complied with the conditions prescribed under subsection (6)(iii) for the time being in force; and
- (d) any covenants required to be included in grants of tenancies by those conditions have been observed.
- (11) A housing association may make a claim under this section notwithstanding anything in subsection (10) above, if the association reasonably considers that the requirements of that subsection are substantially complied with.
- (11A) If as a result of an enquiry—
- (a) into a company tax return, in which a claim under this section by a housing association is included, or
- (b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a housing association, or an amendment of such a claim,
an amendment is made to the association’s return or, as the case may be, to the claim, the liability of the association to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Self-build societies
##### 489
- (1) Where a self-build society makes a claim in that behalf for any year or part of a year of assessment during which the society was approved for the purposes of this section, rent to which the society was entitled from its members for the year or part shall be disregarded for tax purposes.
- (2) Where a claim under subsection (1) above has effect, any adjustment of the society’s liability to tax which is required in consequence of the claim may be made by an assessment or by repayment or otherwise, as the case may require.
- (3) Where a self-build society makes a claim in that behalf for an accounting period or part during which it was approved for the purposes of this section, the society shall be exempt from corporation tax on chargeable gains accruing to it in the accounting period or part thereof on the disposal of any land to a member of the society.
- (4) References in this section to the approval of a self-build society are references to its approval by the Secretary of State, and the Secretary of State shall not approve a self-build society for the purposes of this section unless he is satisfied—
- (a) that the society is, or is deemed to be, duly registered under the Industrial and Provident Societies Act 1965; and
- (b) that the society satisfies such other requirements as may be prescribed by or under regulations under subsection (6) below and will comply with such conditions as may for the time being be so prescribed.
- (5) An approval given for the purposes of this section shall have effect as from such date (whether before or after the giving of the approval) as may be specified by the Secretary of State and shall cease to have effect if revoked by him.
- (5A) The Secretary of State may delegate any of his functions under subsections (4) and (5) to—
- (a) the Regulator of Social Housing, where the society has its registered office in England for the purposes of the Industrial and Provident Societies Act 1965, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to such extent and subject to such conditions as he may specify.
- (6) The Secretary of State may by statutory instrument make regulations for the purpose of carrying out the provisions of this section; and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of the House of Commons.
- (7) A claim under this section may be made at any time not later than two years after the end of the year of assessment or accounting period to which, or to a part of which, it relates.
- (8) Subject to subsection (9) below, no claim shall be made under this section unless during the year or accounting period, or part thereof, to which the claim relates—
- (a) no land owned by the society was occupied, in whole or in part and whether solely or as joint occupier, by a person who was not, at the time of his occupation, a member of the society; and
- (b) the society making the claim satisfies the condition specified in paragraph (a) of subsection (4) above and has complied with the conditions prescribed under paragraph (b) of that subsection and for the time being in force;
and for the purposes of paragraph (a) above, occupation by any other person in accordance with the will, or the provisions applicable on the intestacy, of a deceased member, shall be treated during the first six months after the death as if it were occupation by a member.
- (9) A self-build society may make a claim under this section notwithstanding anything in subsection (8) above, if the society reasonably considers that the requirements of that subsection are substantially complied with.
- (9A) If as a result of an enquiry—
- (a) into a company tax return, in which a claim under this section by a self-build society is included, or
- (b) under paragraph 5 of Schedule 1A to that Act into a claim under this section by a self-build society or an amendment of such a claim,
an amendment is made to the society’s return or, as the case may be, to the claim, the society’s liability to tax for all relevant years or accounting periods may also be adjusted by the making of assessments or otherwise.
- (10) A claim under this section shall be in such form and contain such particulars as may be prescribed by the Board.
- (11) In this section—
- “*self-build society*” has the same meaning as in the Housing Associations Act 1985 or, in Northern Ireland, Part VII of the Housing (Northern Ireland) Order 1981; and
- “*rent*” includes any sums to which a self-build society is entitled in respect of the occupation of any of its land under a licence or otherwise.
- (12) In the application of this section to Northern Ireland—
- (a) any reference in subsections (4) and (5) above to the Secretary of State shall be construed as a reference to the Department of the Environment for Northern Ireland;
- (b) the reference in subsection (4)(a) to the Industrial and Provident Societies Act 1965 shall be construed as a reference to the Industrial and Provident Societies Act (Northern Ireland) 1969; and
- (c) for subsection (6) there shall be substituted the following subsection—
> (6) the Department of the Environment for Northern Ireland may by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 make regulations for the purpose of carrying out the provisions of this section; and a statutory rule containing any such regulations shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Companies carrying on a mutual business or not carrying on a business
@@ -5276,61 +5070,7 @@
##### 500
- (1) Where a participator in an oil field has paid any petroleum revenue tax with which he was chargeable for a chargeable period, then, in computing for corporation tax the amount of his income arising in the relevant accounting period from oil extraction activities or oil rights, there shall be deducted an amount equal to that petroleum revenue tax.
- (2) There shall be made all such adjustments of assessments to corporation tax as are required in order to give effect to subsection (1) above.
- (3) For the purposes of subsection (1) above, the relevant accounting period, in relation to any petroleum revenue tax paid by a company, is—
- (a) the accounting period of the company in or at the end of which the chargeable period for which that tax was charged ends; or
- (b) if that chargeable period ends after the accounting period of the company in or at the end of which the company—
- (i) ceases to carry on the trade giving rise to the income referred to above, or
- (ii) ceases to be within the charge to corporation tax in respect of that trade,
that accounting period.
- (4) Subject to the following provisions of this section if some or all of the petroleum revenue tax in respect of which a deduction has been made under subsection (1) above is subsequently repaid, that deduction shall be reduced or extinguished accordingly; and any additional assessment to corporation tax required in order to give effect to this subsection may be made at any time not later than 4 years after the end of the calendar year in which the first-mentioned tax was repaid.
- (5) If, in a case where paragraph 17 of Schedule 2 to the 1975 Act applies, an amount of petroleum revenue tax in respect of which a deduction has been made under subsection (1) above is repaid by virtue of an assessment under that Schedule or an amendment of such an assessment, then, so far as concerns so much of that repayment as constitutes the appropriate repayment,—
- (a) subsection (4) above shall not apply; and
- (b) the following provisions of this section shall apply in relation to the company which is entitled to the repayment.
- (6) In subsection (5) above and the following provisions of this section—
- (a) “*the appropriate repayment*” has the meaning assigned by sub-paragraph (2) of paragraph 17 of Schedule 2 to the 1975 Act;
- (b) in relation to the appropriate repayment, a “*carried back loss*” means an allowable loss which falls within sub-paragraph (1)(a) of that paragraph and which (alone or together with one or more other carried back losses) gives rise to the appropriate repayment;
- (c) in relation to a carried back loss, “*the operative chargeable period*” means the chargeable period in which the loss accrued; and
- (d) in relation to the company which is entitled to the appropriate repayment, “*the relevant accounting period*”means—
- (i) the accounting period in or at the end of which ends the operative chargeable period, or
- (ii) if the company ceases to carry on its ring fence trade (or to be within the charge to corporation tax in respect of that trade) before the end of the operative chargeable period, the last accounting period of that trade (or, as the case requires, the accounting period during or at the end of which the company ceased to be within the charge to corporation tax in respect of that trade).
- (7) In computing for corporation tax the amount of the company’s income arising in the relevant accounting period from oil extraction activities or oil rights there shall be added an amount equal to the appropriate repayment; but this subsection has effect subject to subsection (8) below in any case where—
- (a) two or more carried back losses give rise to the appropriate repayment; and
- (b) the operative chargeable period in relation to each of the carried back losses is not the same; and
- (c) if subsection (6)(d) above were applied separately in relation to each of the carried back losses there would be more than one relevant accounting period.
- (8) Where paragraphs (a) to (c) of subsection (7) above apply, the appropriate repayment shall be treated as apportioned between each of the relevant accounting periods referred to in paragraph (c) of that subsection in such manner as to secure that the amount added by virtue of that subsection in relation to each of those relevant accounting periods is what it would have been if—
- (a) relief for each of the carried back losses for which there is a different operative chargeable period had been given by a separate assessment or amendment of an assessment under Schedule 2 to the 1975 Act; and
- (b) relief for a carried back loss accruing in an earlier chargeable period had been so given before relief for a carried back loss accruing in a later chargeable period.
- (9) Any additional assessment to corporation tax required in order to give effect to the addition of an amount by virtue of subsection (7) above may be made at any time not later than 4 years after the end of the calendar year in which is made the repayment of petroleum revenue tax comprising the appropriate repayment.
- (10) In this section “*allowable loss*” and “*chargeable period*” have the same meaning as in Part I of the 1975 Act and “*calendar year*” means a period of twelve months beginning on 1st January.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on repayment of PRT
@@ -15286,7 +15026,7 @@
## SCHEDULE 31
#### Application of lower rate to income from savings and distributions.
#### The charge to income tax.
##### 1A
@@ -15322,7 +15062,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for rent etc. not paid.
#### Appeals against determinations under . . . Chapter 4 of Part 3 of ITTOIA 2005.
##### 21A
@@ -15340,7 +15080,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Disposal or exercise of rights in pursuance of deposits.
#### Deep discount securities.
##### 31ZB
@@ -15374,7 +15114,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Payments to trustees of approved profit sharing schemes.
#### Costs of establishing employee share ownership trusts: relief.
##### 42A
@@ -15422,7 +15162,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Approved share incentive plans
#### Employees seconded to charities and educational establishments.
##### 56A
@@ -15488,62 +15228,62 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Paying agents.
##### 76A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 76B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deep discount securities.
##### 79A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 79B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 82A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 82B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 83A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 84A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 85A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 85B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 86A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemptions from section 148.
##### 87A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definitions.
##### 76A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 76B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deep discount securities.
##### 79A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 79B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 82A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 82B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 83A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 84A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 85A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 85B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 86A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for contributions in respect of share option gains.
##### 87A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definitions.
##### 88A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
@@ -16008,7 +15748,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “distribution”.
#### Section 209(3AA): link to shares of company or associated company
##### 118ZG
@@ -16042,7 +15782,7 @@
### Partners: meaning of “contribution to the trade”
#### Interest etc. paid in respect of certain securities.
#### Exempt distributions.
##### 118ZN
@@ -16122,7 +15862,7 @@
- (4) In this section “*stock lending arrangement*” has the same meaning as in section 263B of the 1992 Act.
#### Dividends etc. paid by one member of a group to another.
#### Provisions supplementary to section 247.
#### Relevant loan interest.
@@ -16160,7 +15900,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Aggregation of wife’s income with husband’s.
#### Apportionment of income and gains.
##### 144A
@@ -16262,7 +16002,7 @@
#### Exceptions from tax.
#### Apportionment of income and gains.
#### UK property business or overseas property business
##### 177A
@@ -16294,7 +16034,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Section 432B apportionment: value of non-participating funds.
#### Section 432B apportionment: business transfers-in
##### 197A
@@ -16582,7 +16322,7 @@
- “*tax advantage*” has the meaning given by section 1139 of CTA 2010
#### Section 432B apportionment: business transfers-in
#### Additions to non-profit funds: amount of loss reduction
##### 234A
@@ -16600,7 +16340,7 @@
### Election by company paying dividend
#### Substitution of security: supplemental.
#### Income or gains arising from property investment LLP
##### 246A
@@ -16714,7 +16454,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Computation of losses and limitation on relief.
#### Modifications where tax charged under section 35 of CTA 2009.
### Approved share incentive plans
@@ -16730,7 +16470,7 @@
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Additions to non-profit funds: amount of loss reduction
#### Modifications in relation to BLAGAB group reinsurers
##### 251D
@@ -16754,63 +16494,9 @@
##### 257AB
- (1) This section applies if —
- (a) the claimant is, for the whole or any part of the year of assessment, living with his spouse or civil partner,
- (b) either the claimant or his spouse or civil partner was born before 6th April 1935,
- (c) the marriage or civil partnership was entered into on or after 5th December 2005 or, if the marriage was entered into before that date, an election for this section to apply has effect for that year, and
- (d) the claimant's net income for that year exceeds that of his spouse or civil partner or, if they have the same amount of net income for that year, the claimant is specified in an election as the person to be entitled to relief under this section for that year.
- (2) The claimant shall be entitled for that year to a tax reduction—
- (a) calculated by reference to £5,975 (if either the claimant or his spouse or civil partner is at any time within that year of the age of 75 or upwards), or
- (b) calculated by reference to £5,905 (in any other case).
- (3) For the purposes of subsection (2)(a) above an individual who would have been of or over the age of 75 within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.
- (4) In relation to a claimant whose adjusted net income for the year of assessment exceeds £19,500, subsection (2) above applies as if the amounts specified in it were reduced by—
- (a) one half of the excess, less
- (b) any reduction made in his allowance under section 257 by virtue of subsection (5) of that section.
- (5) The amounts specified in subsection (2) above shall not by virtue of subsection (4) above be treated as reduced below the minimum amount.
- (6) An individual shall not be entitled by virtue of this section to more than one tax reduction for any year of assessment.
- (7) In relation to a claim by an individual who —
- (a) becomes a spouse or civil partner in the year of assessment, and
- (b) has not previously in the year been entitled to relief under this section,
this section shall have effect as if the amounts specified in subsection (2) above were reduced by one twelfth for each month of the year ending before the date of the marriage or civil partnership.
- In this subsection “*month*” means a month beginning with the 6th day of a month of the calendar year.
- (8) An election under subsection (1)(c) —
- (a) shall be made jointly by the parties to the marriage,
- (b) shall be made before the first year of assessment for which it is to have effect,
- (c) shall have effect for that and each succeeding year of assessment for which any party to the marriage is entitled to relief under this section, and
- (d) shall be irrevocable.
- (9) An election under subsection (1)(d) —
- (a) shall be made jointly by the parties to the marriage or civil partnership, and
- (b) shall be made not more than 4 years after the end of the year of assessment to which the election relates.
- (10) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.
#### Securities.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer schemes: transferor
##### 257BA
@@ -16818,5153 +16504,5043 @@
##### 257BB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257B
- (1) Where—
- (a) an individual is entitled to a tax reduction under section 257A or 257AB, but
- (b) the amount of the tax reduction to which the individual is entitled is greater than the individual's comparable tax liability,
the individual's spouse or civil partner shall be entitled (in addition to any tax reduction to which that spouse or civil partner is entitled by virtue of an election under section 257BA) to a tax reduction equal to the unused part of the individual's MCA tax reductions.
- (1A) The individual's MCA tax reductions are the sum of—
- (a) the tax reduction to which the individual is entitled under section 257A or 257AB, and
- (b) any tax reduction to which the individual is entitled by virtue of an election under section 257BA(3).
- (1B) The unused part of the individual's MCA tax reductions is equal to—
- (a) the individual's MCA tax reductions, less
- (b) the individual's comparable tax liability.
- (2) Subsection (1) above shall not apply for a year of assessment unless the claimant’s spouse or civil partner gives notice to the inspector that it is to apply.
- (a) a man is entitled to relief under section 257A, but
- (b) the amount which he is entitled to deduct from his total income by virtue of that section exceeds what is left of his total income after all other deductions have been made from it,
his wife shall be entitled to a deduction from her total income of an amount equal to the excess.
- (2) In determining for the purposes of subsection (1)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made—
- (a) on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or
- (b) under section 289 or
- (c) on account of any payments to which section 593(2) or 639(3) applies,or
- (d) on account of any payments to which section 54(5) of the Finance Act 1989 applies.
, or
- (e) on account of any payments to which section 32(4) of the Finance Act 1991 applies.
- (3) This section shall not apply for a year of assessment unless the claimant’s husband has given to the inspector written notice that it is to apply; and any such notice—
- (a) shall be given not later than six years after the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
##### 257C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 261A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 266A
- (1) This section applies if—
- (a) pursuant to an employer-financed retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and
- (b) the payment is made under such an insurance or contract as is mentioned in section 266.
This section applies whether or not the accrual of the relevant benefits is dependent on any contingency.
- (2) Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if—
- (a) the payment had been made by him, and
- (b) the insurance or contract under which the payment is made had been made with him.
- (3) For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.
- (4) If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them.
- (5) The amount treated as paid for or in respect of each employee is—
$$A×BC$where—A is the sum paid,B is the amount which would have had to be paid to secure the benefits to be provided for or in respect of the employee in question, andC is the total amount which would have had to be paid to secure the benefits to be provided for or in respect of all the employees if separate payments had been made in the case of each of them.$
- (6) This section does not apply if—
- (a) in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or
- (b) the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met.
- (7) Those conditions are—
- (a) that the employment is with a foreign employer, and
- (b) that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme.
- (8) In subsection (6)(a) “*earnings charged on remittance*” means earnings which are taxable earnings under—
- (a) section 22 of ITEPA 2003 (chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK), or
- (b) section 26 of that Act (foreign earnings for year when employee resident, but not ordinarily resident, in UK).
- (9) In this section—
- “*employer-financed retirement benefits scheme*”, and
- “*relevant benefits*”,
- have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).
#### Modifications for change of tax basis
##### 282A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 282B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer schemes: reduction of income of transferee
##### 289A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 289B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 290A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Life assurance trade profits advantage: transferee
##### 291A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 291B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 299A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 299B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 300A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 301A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 303AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Application of s. 444BA rules to other equalisation reserves.
##### 303A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer schemes: reduction of income of transferee
##### 304A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 305A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Taxation in respect of other business: incorporated friendly societies qualifying for exemption.
#### Transfers of other business
##### 326A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 326B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 326BB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 326C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 326D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 327A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Old societies.
##### 329AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 329AB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 329A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 329B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 329C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 331A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 332A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 333A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 333B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 338B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 337A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 338A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 339A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 342A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption for trade unions and employers’ associations.
#### Building societies: time for payment of tax.
##### 343ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 343A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relevant deposits: computation of tax on interest.
#### Treatment of oil extraction activities etc. for tax purposes.
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure.
##### 347A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 347B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relevant deposits: computation of tax on interest.
##### 349ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 349A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Election that assets not be foreign business assets
##### 349B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 349C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 349D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 349E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 350A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 356A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 356B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 356C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 356D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Section 432B apportionment: supplementary provisions.
##### 357A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 357B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 357C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 360A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Profits reserved for policy holders and annuitants.
#### Returns.
##### 367A
- (1) Sections 353 and 365 have effect as if—
- (a) purchase and resale arrangements involved the making of a loan, and
- (b) alternative finance return were interest.
- (2) Section 366 has effect accordingly.
- (3) In this section—
- “*alternative finance return*” has the meaning given in sections 564I to 564L of ITA 2007, and
- “*purchase and resale arrangements*” means arrangements to which section 564C of ITA 2007 applies.
#### Gifts of shares, securities and real property to charities etc
##### 374A
- (1) This section applies where, in the case of any loan, interest on the loan never has been relevant loan interest or the borrower never has been a qualifying borrower.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) as respects which either of the conditions mentioned in paragraphs (a) and (b) of section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment of interest were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to make any deduction or to retain any amount deducted and, accordingly, where any amount has been deducted, he shall be liable to make good that amount and an officer of the Board may make such assessments as may in his judgment be required for recovering that amount.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made . . . .
- (5) If the borrower fraudulently or negligently makes any false statement or representation in connection with the making of any deduction, he shall be liable to a penalty not exceeding the amount deducted.
##### 375A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 376A
- (1) The Board shall maintain, and publish in such manner as they consider appropriate, a register for the purposes of section 376(4).
- (1A) The following are entitled to be registered—
- (a) a person who has permission under Part 4 of the Financial Services and Markets Act 2000—
- (i) to accept deposits; or
- (ii) to effect or carry out contracts of general insurance;
- (b) a 90 per cent subsidiary of a person mentioned in—
- (i) section 376(4)(e); or
- (ii) paragraph (a) above;
- (c) any other body whose activities and objects appear to the Board to qualify it for registration.
- (2) If the Board are satisfied that an applicant for registration is entitled to be registered, they may register the applicant generally or in relation to any description of loan specified in the register, with effect from such date as may be so specified; and a body which is so registered shall become a qualifying lender in accordance with the terms of its registration.
- (3) The registration of any body may be varied by the Board—
- (a) where it is general, by providing for it to be in relation to a specified description of loan, or
- (b) where it is in relation to a specified description of loan, by removing or varying the reference to that description of loan,
and where they do so, they shall give the body written notice of the variation and of the date from which it is to have effect.
- (4) If it appears to the Board at any time that a body which is registered under this section would not be entitled to be registered if it applied for registration at that time, the Board may by written notice given to the body cancel its registration with effect from such date as may be specified in the notice.
- (5) The date specified in a notice under subsection (3) or (4) above shall not be earlier than the end of the period of 30 days beginning with the date on which the notice is served.
- (6) Any body which is aggrieved by the failure of the Board to register it under this section, or by the variation or cancellation of its registration, may appeal, by notice given to the Board before the end of the period of 30 days beginning with the date on which the body is notified of the Board’s decision. . . .
### Losses from UK property business or overseas property business
##### 379A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 379B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Conditions for approval of retirement benefit schemes.
##### 384A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Losses from UK property business or overseas property business
##### 392A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 392B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 393A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 393B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Cessation of approval: tax on certain schemes.
##### 403ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403ZB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403ZC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403ZD
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403ZE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 403G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 411ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 411A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Termination of relief under this Chapter, and transitional provisions.
#### Interpretation.
#### Definition of insurance company.
#### Modification of s. 444BA for mutual or overseas business and for non-resident companies.
#### Taxation in respect of other business: incorporated friendly societies qualifying for exemption.
##### 431ZA
- (1) An insurance company may, in its company tax return for the first accounting period of the company beginning on or after 1 January 2008 in which any of the assets of the company's long-term insurance fund would (apart from this section) be foreign business assets, elect that none of the assets of the company's long-term insurance fund are to be regarded for the purposes of this Act as being foreign business assets.
- (2) The election has effect for that accounting period and all subsequent accounting periods of the company.
- (3) An election under subsection (1) is irrevocable.
##### 431A
- (1) The Treasury may by order amend any of the life assurance provisions of the Corporation Tax Acts where it is expedient to do so in consequence of the exercise of any power under the Financial Services and Markets Act 2000, in so far as that Act relates to insurance companies.
- (2) Where any exercise of a power under that Act has effect for a period ending on or before, or beginning before and ending after, the day on which an order containing an amendment in consequence of that exercise is made under subsection (1) above, the power conferred by that subsection includes power to provide for the amendment to have effect in relation to that period.
- (2A) The Treasury may by order make provision as to the application of the Corporation Tax Acts in relation to insurance special purpose vehicles.
- (2B) An order under subsection (2A) above may in particular contain provision—
- (a) making amendments of any provision of the Corporation Tax Acts, or
- (b) making provision for the life assurance provisions of the Corporation Tax Acts to have effect in relation to any specified description of insurance special purpose vehicles subject to specified modifications or exceptions.
- (2C) An order under subsection (2A) above—
- (a) may make provision having effect in relation to accounting periods current when it is made, and
- (b) if it is made in consequence of, or otherwise in connection with, provision made by any enactment or instrument, may make provision having effect in relation to the same times as that enactment or instrument.
- (3) The Treasury may by order amend any of the following provisions—
- (a) sections 432ZA, 432A, 432B to 432G and 755A . . . ;
- (b) sections 83A, 85, 88 and 89 of the Finance Act 1989;
- (c) section 210A of the Taxation of Chargeable Gains Act 1992.
- (4) An order under subsection (3) above may only be made so as to have effect in relation to periods of account—
- (a) beginning on or after 1st January 2005, and
- (b) ending before 1st October 2006.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Any power conferred by this section to make an order includes power to make—
- (a) different provision for different cases or different purposes, and
- (b) incidental, supplemental, consequential or transitional provision and savings.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 431AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432A
- (1) Subject to section 432B, this section has effect for determining for the purposes of any provision of the Corporation Tax Acts in relation to any period for which an insurance company carries on business what parts of—
- (a) income or losses arising from the assets of the company’s long-term insurance fund, or
- (b) gains or losses accruing on the disposal of such assets in accordance with the provisions of the 1992 Act,
are referable to any category of business.
- (1ZA) In subsection (1)(a) above “*income*” means—
- (a) income chargeable under Chapter 3 of Part 4 of CTA 2009 (profits of a property business) in respect of any separate UK property businesses treated as carried on by the company under section 432AA,
- (b) income chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of distributions treated by section 548(5) of CTA 2010 as profits of a UK property business carried on by the company,
- (c) income chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of any overseas property business treated as carried on by the company under section 432AA,
- (d) income chargeable under Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies) or Chapter 6 of that Part (sale of foreign dividend coupons),
- (da) income chargeable under Chapter 7 of Part 10 of CTA 2009 (annual payments not otherwise charged) or Chapter 8 of that Part (income not otherwise charged) which arises from a source outside the United Kingdom,
- (e) distributions received by the company from companies resident in the United Kingdom,
- (f) credits in respect of any creditor relationships (within the meaning of Part 5 of CTA 2009) of the company,
- (g) credits in respect of any derivative contracts (within the meaning of Part 7 of CTA 2009) of the company,
- (h) any income of the company chargeable under Chapter 5 of Part 10 of CTA 2009 (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged),
- (i) any credits brought into account by the company under Chapter 2 of Part 8 of CTA 2009 (intangible fixed assets), and
- (j) any income of the company chargeable under any provision to which section 1173 of CTA 2010 (miscellaneous charges) applies, other than profits of the company chargeable under section 436A (gross roll-up business).
- (1ZB) In subsection (1)(a) above “*losses*” means—
- (a) losses in respect of any separate UK property businesses treated as carried on by the company under section 432AA,
- (b) losses in respect of any overseas property businesses treated as carried on by the company under that section,
- (c) debits in respect of any creditor relationships (within the meaning of Part 5 of CTA 2009) of the company,
- (d) debits in respect of any derivative contracts (within the meaning of Part 7 of CTA 2009) of the company,
- (e) any debits brought into account by the company under Chapter 3 of Part 8 of CTA 2009 (intangible fixed assets), and
- (f) any losses of the company computed in the same way as profits chargeable under any provision to which section 1173 of CTA 2010 applies, other than any losses of gross roll-up business.
- (1ZC) For determining as mentioned in subsection (1) above what parts of income or gains arising from the assets of the company's long-term insurance fund are referable to PHI business (to the extent that it would not be the case by virtue of subsections (1ZA) and (1ZB))—
- (a) “income” also includes profits shown in the technical account, and
- (b) “losses” also includes losses so shown.
- (1A) If the company carries on only one category of business in the period—
- (a) all of the income and losses referred to in paragraph (a) of subsection (1) above, and
- (b) all of the gains and losses referred to in paragraph (b) of that subsection,
are referable to that category of business; but if the company carries on more than one category of business in the period, the following provisions shall apply.
- (2) The categories of business referred to in subsections (1) and (1A) above are—
- (a) basic life assurance and general annuity business,
- (b) gross roll-up business, and
- (c) PHI business.
- (3) Income or losses arising from, and gains or losses accruing on the disposal of, assets linked to any category of business is referable to that category of business.
- (3A) Amounts falling within—
- (a) section 442A,
- (b) section 85(2C) of the Finance Act 1989, or
- (c) section 85A of that Act,
are directly referable to basic life assurance and general annuity business.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) Income or losses arising from, and gains or losses accruing on the disposal of, foreign business assets is referable to gross roll-up business.
- (5) There is referable to any category of business . . . the relevant fraction of any income and losses referred to in paragraph (a) of subsection (1) above, and any gains and losses referred to in paragraph (b) of that subsection, not directly referable to any category of business.
- (6) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to basic life assurance and general annuity business, is—
$$AA+B+C$where—A is the aggregate of—(a) the mean of the opening and closing liabilities of the basic life assurance and general annuity business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business,(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and(c) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts;B is the aggregate of—(a) the mean of the opening and closing liabilities of the gross roll-up business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts; andC is the aggregate of—(a) the mean of the opening and closing liabilities of the PHI business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts.$
- (6A) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to gross roll-up business, is—
$$BA+B+C$where A, B and C have the same meaning as in subsection (6) above.$
- (6B) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to PHI business, is—
$$CA+B+C$where A, B and C have the same meaning as in subsection (6) above.$
- (6C) But if the denominator found in accordance with subsection (6), (6A) or (6B) above is nil, the relevant fraction for the purposes of subsection (5) above in relation to the category of business in question is such fraction as is just and reasonable.
- (7) For the purposes of subsections (5), (6) , (6A) and (6B) above—
- (a) income and losses referred to in paragraph (a) of subsection (1) above, and gains and losses referred to in paragraph (b) of that subsection, are directly referable to a category of business if referable to that category by virtue of subsection (3) or (4A) above, . . . and
- (b) assets are directly referable to a category of business if income and losses arising from the assets, and gains and losses accruing on the disposal of the assets, are so referable by virtue of subsection (3) or (4A) above,. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) In subsection (6) above—
- (a) “*appropriate part*”, in relation to the free assets amount, means—
- (i) where none (or none but an insignificant proportion) of the liabilities of the long-term business are with-profits liabilities, the part of that amount which bears to the whole the proportion A/B where—
A is the amount of the liabilities of the category of business in question (but taking that amount to be nil if it would otherwise be below nil);
B is the whole amount of the liabilities of the long-term business; and
- (ii) in any other case the part of the free assets amount which bears to the whole the proportion C/D where—
C is the amount of the with-profits liabilities of the category of business in question;
D is the whole amount of the with-profits liabilities of the long-term business; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
This is subject to subsection (8ZA) below.
- (8ZA) If for the purposes of subsection (8)(a) above either B or D is nil then, in paragraph (c) of the definition of A and paragraph (b) of the definitions of B and C in subsection (6) above, “*appropriate part*”, in relation to the free assets amount, means the part of that amount which bears to the whole such proportion as is just and reasonable.
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432B
- (1) This section and sections 432C to 432G have effect where it is necessary in accordance with section 83 of the Finance Act 1989 to determine what parts of any items brought into account, within the meaning of that section, are referable to life assurance business or gross roll-up business.
- (2) Where for that purpose reference falls to be made to more than one account recognised for the purposes of that section, the provisions of sections 432C to 432G apply separately in relation to each account.
- (3) Section 432C applies where the business with which an account is concerned (“*the relevant business*”) relates exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus; and sections 432E and 432F apply where the relevant business relates wholly or partly to other policies or contracts (and section 432G applies in either case).
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432C
- (1) This section specifies the extent to which the net amount is referable to life assurance business or to gross roll-up business.
- (2) In this section “*the net amount*” means the aggregate of the amounts brought into account—
- (a) as investment income,
- (b) as an increase in the value of assets, or
- (c) as other income,
less the aggregate of the amounts brought into account as a decrease in the value of assets.
- (3) To the extent that the net amount is attributable to—
- (a) assets linked to life assurance business, or
- (b) foreign business assets,
it is referable to life assurance business.
- (4) There is also referable to life assurance business the appropriate fraction of so much of the net amount as is not attributable to linked assets or foreign business assets.
- (5) For the purposes of subsection (4) above “the appropriate fraction” is—
$$AA+B$where—A is the mean of the opening and closing liabilities of the relevant business so far as referable to life assurance business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the aggregate of the mean of the opening and closing net values of assets linked to the relevant business so far as so referable and foreign business assets; andB is the mean of the opening and closing liabilities of the relevant business so far as referable to PHI business, reduced (but not below nil) by the mean of the opening and closing net values of any assets linked to PHI business.$
- (6) But if the denominator found in accordance with subsection (5) above is nil, the appropriate fraction for the purposes of subsection (4) above is such fraction as is just and reasonable.
- (7) To the extent that the net amount is attributable to—
- (a) assets linked to gross roll-up business, or
- (b) foreign business assets,
it is referable to gross roll-up business.
- (8) There is also referable to gross roll-up business the relevant fraction of so much of the net amount as is not attributable to linked assets or foreign business assets.
- (9) For the purposes of subsection (8) above “the relevant fraction” is—
$$CC+D$where—C is the mean of the opening and closing liabilities of the relevant business so far as referable to gross roll-up business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the aggregate of the mean of the opening and closing net values of any assets linked to gross roll-up business and foreign business assets; andD is the mean of the opening and closing liabilities of the relevant business so far as referable to basic life assurance and general annuity business or PHI business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets linked to either of those categories of business.$
- (10) But if the denominator found in accordance with subsection (9) above is nil, the relevant fraction for the purposes of subsection (8) above is such fraction as is just and reasonable.
- (11) For the purposes of this section, so much of the net amount—
- (a) as is brought into account as other income in an internal linked fund of the company, and
- (b) as is not attributable to assets of that fund,
is to be treated as linked to a category of business to the same extent as income attributable to an asset of the fund would, by virtue of section 432ZA, be referable to that category of business.
##### 432D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432E
- (1) The part of the net amount which is referable to life assurance business or to gross roll-up business is—
- (a) the amount determined in accordance with subsections (2) and (2A) below, or
- (b) if greater, the amount determined in accordance with subsection (3) below.
- (1A) In this section “*the net amount*” means the aggregate of the amounts brought into account—
- (a) as investment income,
- (b) as an increase in the value of assets, or
- (c) as other income,
less the aggregate of the amounts brought into account as a decrease in the value of assets.
- (2) For the purposes of subsection (1) above there shall be determined the amount which is such as to secure—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . that
$$CS-CAS=(S-AS)×CASAS$where—S is the surplus of the relevant business;AS is so much of that surplus as is allocated to persons entitled to the benefits provided for by the policies or contracts to which the relevant business relates;CAS is so much of the surplus so allocated as is attributable to policies or contracts of life assurance business or of gross roll-up business; andCS is so much of the surplus of the relevant business as would remain if the relevant business were confined to life assurance business or to gross roll-up business.$
- (2A) In a case where an amount or amounts are taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of subsection (2B) of that section or by virtue of section . . . 444AB, . . . 444AEA,444AECA, 444AF(2) or 444AK(2) of this Act, the amount determined under subsection (2) above is increased by—
$$CASAS×RP$where—CAS and AS have the same meanings as in subsection (2) above; andRP is the amount or the aggregate of the amounts taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of any of the following provisions—subsection (2B) of that section;section 444AB . . . of this Act;section 444AEA or 444AECA of this Act;. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .subsection (2) of section 444AF of this Act (and see subsections (5) and (6) of that section);subsection (2) of section 444AK of this Act (but only for the purposes mentioned in subsection (3) of that section).$
- (3) For the purposes of subsection (1) above there shall also be determined the aggregate of—
- (a) the applicable percentage of what is left of the mean of the opening and closing liabilities of the relevant business so far as referable to the category of business concerned (but taking that mean to be nil if it would otherwise be below nil) after deducting from it the mean of the opening and closing values of any assets of the relevant business linked to that category of business . . . , and
- (b) the part of the net amount . . . that is attributable to assets linked to that category of business . . . .
- (4) Subject to subsection (4A) below, for the purposes of subsection (3) above “*the applicable percentage*”, in any case, is—
$$AB×100$where—A is so much of the net amount as is brought into account in respect of the relevant business less such part of it as is attributable to linked assets . . . ; andB is the mean of the opening and closing liabilities of the relevant business reduced by the mean of the opening and closing values of any assets of the relevant business which are linked assets . . . .$
- (4A) If the mean of the opening and closing liabilities of the relevant business reduced by the opening and closing values of any assets of the relevant business which are linked assets . . . is nil then, for the purposes of subsection (3) above, “*the applicable percentage*” is such percentage as is just and reasonable.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfers of other business
#### Transfers of other business
##### 434A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where for any accounting period the loss arising to an insurance company from its life assurance business falls to be computed in accordance with the life assurance trade profits provisions—
- (a) the loss resulting from the computation shall be reduced (but not below nil) by . . . —
- (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ii) any relevant non-trading deficit for that period on the company’s debtor relationships; and
- (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) if the whole or any part of that loss as so reduced is set off—
- (i) under section 37 of CTA 2010, or
- (ii) under Chapter 4 of Part 5 of CTA 2010,
any loss for that period under section 436A shall be reduced (but not below nil) by the total of the amounts set off as mentioned in sub-paragraphs (i) and (ii) above.
- (2A) The reference in subsection (2)(a)(ii) above to a relevant non-trading deficit for any period on a company’s debtor relationships is a reference to the non-trading deficit on the company’s loan relationships . . . for the company’s basic life assurance and general annuity business if credits and debits given in respect of the company’s creditor relationships (within the meaning of Part 5 of CTA 2009) were disregarded.
- (3) In the case of a company carrying on life assurance business, no relief shall be allowable —
- (a) under Chapter 2, 4 or 6 of Part 4 of CTA 2010 (loss relief) or under Part 5 (group relief) of that Act,
- (aa) (where the company's life assurance business is not mutual business) in respect of any qualifying charitable donation, or
- (b) in respect of any amount representing a non-trading deficit on the company’s loan relationships that has been computed otherwise than by reference to debits and credits referable to that business,
against the policy holders’ share of the relevant profits for any accounting period.
- For the purposes of this subsection “*the policy holders’ share of the relevant profits*” has the same meaning as in section 89 of the Finance Act 1989.
- (4) For the purposes of section 105 of CTA 2010, where the surrendering company is an insurance company which is charged to tax under the I minus E basis in respect of its life assurance business for the surrender period, the company's gross profits of that period do not include its relevant profits (within the meaning of section 88 of the Finance Act 1989) for that period; and expressions used in this subsection and section 105 of CTA 2010 have the same meaning here as there.
#### Settlements made after 6th April 1965.
##### 438A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Imputation of chargeable profits and creditable tax of controlled foreign companies
##### 440A
- (1) Subsection (2) below applies where the assets of an insurance company include securities of a class all of which would apart from this section be regarded for the purposes of corporation tax on chargeable gains as one holding.
- (2) Where this subsection applies—
- (a) so many of the securities as are identified in the company’s records as securities by reference to the value of which there are to be determined benefits provided for under policies or contracts the effecting of all (or all but an insignificant proportion) of which constitutes the carrying on of—
- (i) basic life assurance and general annuity business, or
- (ii) gross roll-up business,
shall be treated for the purposes of corporation tax as a separate holding linked solely to that business,
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) so many of the securities as are included in the company’s long-term insurance fund but do not fall within paragraph (a) shall be treated for those purposes as a separate holding which is an asset of that fund (but not of the description mentioned in that paragraph), and
- (e) any remaining securities shall be treated for those purposes as a separate holding which is not of any of the descriptions mentioned in the preceding paragraphs.
- (3) Subsection (2) above also applies where the assets of an insurance company include securities of a class and apart from this section some of them would be regarded as a 1982 holding, and the rest as a section 104 holding, for the purposes of corporation tax on chargeable gains.
- (4) In a case within subsection (3) above—
- (a) the reference in any paragraph of subsection (2) above to a separate holding shall be construed, where necessary, as a reference to a separate 1982 holding and a separate section 104 holding, and
- (b) the questions whether such a construction is necessary in the case of any paragraph and, if it is, how many securities falling within the paragraph constitute each of the two holdings shall be determined in accordance with paragraph 12 of Schedule 6 to the Finance Act 1990 and the identification rules applying on any subsequent acquisitions and disposals.
- (5) Section 105 of the 1992 Act shall have effect where subsection (2) above applies as if securities regarded as included in different holdings by virtue of that subsection were securities of different kinds.
- (6) In this section—
- “*1982 holding*” has the same meaning as in section 109 of the 1992 Act;
- “*section 104 holding*” has the same meaning as in section 104(3) of that Act; and
- “*securities*” means shares, or securities of a company, and any other assets where they are of a nature to be dealt in without identifying the particular assets disposed or acquired.
- (7) In a case where the profits of a company’s life assurance business are charged to tax under section 35 of CTA 2009 (charge on trade profits) this section has effect with the modification specified in section 440B(4).
##### 441A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444A
- (1) . . . This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“the transferor”) to another (“the transferee”).
- (2) Any expenses payable which (making the assumptions in subsection (3B) below) would have fallen to be brought into account by the transferor in determining the deduction for expenses payable to be allowed under section 76 in computing profits for an accounting period following the period which ends with the day on which the transfer takes place shall, instead, be brought into account under and in accordance with that section by the transferee as expenses payable by him (and giving effect in the case of acquisition expenses, to section 86(6) to (9) of the Finance Act 1989).
- (3) Any loss which (making the assumptions in subsection (3B) below)—
- (a) would have been available under section 436A(4) to be set off against profits of the transferor for the accounting period following that which ends with the day on which transfer takes place, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
shall, instead, be treated as a loss of the transferee (and available to be set off against profits of gross roll-up business)if the conditions mentioned in subsection (3YA) are satisfied in relation to the business transferred.
- (3YA) The conditions are—
- (a) the ownership condition set out in section 941 of CTA 2010, and
- (b) the tax condition set out in section 943 of that Act.
- (3ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) Any subsection (2) excess (within the meaning of section 432F(2)) which (making the assumptions in subsection (3B) below) would have been available under section 432F(3) or (4) to reduce a subsection (3) figure (within the meaning of section 432F(1)) of the transferor in an accounting period following that which ends with the day on which transfer takes place—
- (a) shall, instead, be treated as a subsection (2) excess of the transferee, and
- (b) shall be taken into account in the first accounting period of the transferee ending after the date of the transfer (to reduce the subsection (3) figure or, as the case may be, to produce or increase a subsection (2) excess for that period),
in relation to the revenue account of the transferee dealing with or including the business transferred.
- (3B) The assumptions referred to in subsections (2), (3) and (3A) above are—
- (a) that the transferor had continued to carry on the business transferred after the transfer, and
- (b) where there is no accounting period of the transferor ending with the transfer date, that there was such an accounting period.
- (4) Where acquisition expenses are treated as expenses payable by the transferee by virtue of subsection (2) above, the amount deductible for the first accounting period of the transferee ending after the transfer takes place shall be calculated as if that accounting period began with the day after the transfer.
- (5) Where the transfer is of part only of the transferor’s long-term business, subsection (2), (3) or (3A) above shall apply only to such part of any amount to which it would otherwise apply as is appropriate.
- (6) Any question arising as to the operation of subsection (5) above shall be determined in the same manner as an appeal, and both the transferor and transferee shall be entitled to be a party to any proceedings.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Classes of life assurance business
##### 431B
- (1) In this Chapter “*pension business*” means so much of a company’s life assurance business as is referable to contracts entered into for the purposes of a registered pension scheme or is the reinsurance of such business.
- (2) Where a pension scheme ceases to be a registered pension scheme by virtue of the withdrawal of registration of the pension scheme under section 157 of the Finance Act 2004, any of the company’s life assurance business that was pension business when the pension scheme was a registered pension scheme is to be treated as ceasing to be pension business at the beginning of the period of account of the company in which the pension scheme so ceases to be a registered pension scheme.
- (3) Where—
- (a) an individual is entitled to a tax reduction by virtue of an election under section 257BA, but
- (b) the amount of the tax reduction to which the individual is entitled is greater than the individual's comparable tax liability,
the individual's spouse or civil partner shall be entitled (in addition to any tax reduction to which that spouse or civil partner is entitled by virtue of section 257A or 257AB) to a tax reduction equal to the unused part of the individual's tax reduction.
- (3AA) The unused part of the individual's tax reduction is equal to—
- (a) the tax reduction to which the individual is entitled by virtue of the election under section 257BA, less
- (b) the individual's comparable tax liability.
- (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) Subsection (3) above shall not apply for a year of assessment unless the claimant’s spouse or civil partner gives notice to the inspector that it is to apply.
- (5) Any notice under subsection (2) or (4) above—
- (a) shall be given not more than 4 years after the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
- (5A) For the purposes of this section, the comparable tax liability of an individual is the amount of the individual's tax left after Step 6 of the calculation in section 23 of ITA 2007, making that calculation with the modifications set out in subsections (5B) and (5C).
- (5B) In making that calculation, do not deduct any tax reduction under—
- (a) section 788 (double taxation arrangements: relief by agreement), or
- (b) section 790(1) (relief for foreign tax where there are no double taxation arrangements).
- (5C) If the individual's entitlement to a tax reduction under section 257A, 257AB, 257BA or this section is extinguished under section 423(4) of ITA 2007 (gift aid: restriction of reliefs) to any extent, deduct from the amount calculated in accordance with subsections (5A) and (5B) the amount by which the tax reduction is reduced.
- (5D) For the purposes of this section a person is treated as being entitled to a tax reduction under section 788 if the person is entitled to credit against income tax under arrangements which have effect under that section.
- (5E) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.
- (a) immediately before 6th April 2006 an annuity contract falls within any of the descriptions of contracts specified in subsection (2) of this section as it had effect immediately before that date, but
- (b) on or after that date the contract does not fall to be regarded for the purposes of this section as having been entered into for the purposes of a registered pension scheme,
the contract is to be treated for the purposes of this section as having been entered into for such purposes.
##### 431BA
- (1) In this Chapter “*child trust fund business*” means so much of a company's life assurance business as is referable to child trust fund policies (but not including the reinsurance of such business).
- (2) In this section “*child trust fund policy*” means a policy of life insurance which is an investment under a child trust fund (within the meaning of the Child Trust Funds Act 2004).
##### 431BB
- (1) In this Chapter “*individual savings account business*” means so much of a company's life assurance business as is referable to individual savings account policies (but not including the reinsurance of such business).
- (2) In this section “*individual savings account policy*” means a policy of life insurance which is an investment of a kind specified in regulations made by virtue of section 695(1) of ITTOIA 2005.
##### 431C
- (1) In this Chapter “*life reinsurance business*” means reinsurance of life assurance business other than pension business or business of any description excluded from this section by regulations made by the Board.
- (2) Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.
##### 431D
- (1) In this Chapter “*overseas life assurance business*” means so much of a company's relevant life assurance business as is with a policy holder or annuitant not residing in the United Kingdom (but not including the reinsurance of such business).
- (1A) In subsection (1) above “*relevant life assurance business*” means life assurance business other than—
- (a) pension business
- (b) individual savings account business,
- (c) child trust fund business, and
- (d) business of any description prescribed by regulations made by the Commissioners for Her Majesty's Revenue and Customs.
- (2) Regulations under subsection (1A) above may describe the excluded business by reference to any circumstances appearing to the Commissioners to be relevant.
- (3) The Commissioners for Her Majesty's Revenue and Customs may by regulations—
- (a) make provision as to the circumstances in which a trustee who is a policy holder or annuitant residing in the United Kingdom is to be treated for the purposes of this section as not so residing; and
- (b) provide that nothing in Chapter II of Part XIII or Chapter 9 of Part 4 of ITTOIA 2005 shall apply to a policy or contract which constitutes overseas life assurance business by virtue of any such provision as is mentioned in paragraph (a) above.
- (4) Regulations under subsection (1A) or (3) above may contain such supplementary, incidental, consequential or transitional provision as appears to the Commissioners to be appropriate (including provision amending any enactment or any instrument made under an enactment).
##### 431E
- (1) The Board may by regulations make provision for giving effect to section 431D.
- (2) Such regulations may, in particular—
- (a) provide that, in such circumstances as may be prescribed, any prescribed issue as to whether business is or is not overseas life assurance business (or overseas life assurance business of a particular kind) shall be determined by reference to such matters (including the giving of certificates or undertakings, the giving or possession of information or the making of declarations) as may be prescribed,
- (b) require companies to obtain certificates, undertakings, information or declarations from policy holders or annuitants, or from trustees or other companies, for the purposes of the regulations,
- (c) make provision for dealing with cases where any issue such as is mentioned in paragraph (a) above is (for any reason) wrongly determined, including provision allowing for the imposition of charges to tax (with or without limits on time) on the insurance company concerned or on the policy holders or annuitants concerned,
- (d) require companies to supply information and make available books, documents and other records for inspection on behalf of the Board, and
- (e) make provision (including provision imposing penalties) for contravention of, or non-compliance with, the regulations.
- (3) The regulations may—
- (a) make different provision for different cases, and
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 431EA
In this Chapter “*gross roll-up business*” means business of any of the following kinds—
- (a) pension business;
- (b) child trust fund business;
- (c) individual savings account business;
- (d) life reinsurance business; and
- (e) overseas life assurance business.
##### 431F
In this Chapter “*basic life assurance and general annuity business*” means life assurance business other than gross roll-up business.
### Basis of taxation etc
##### 431G
- (1) This section applies in relation to an insurance company which carries on life assurance business (whether or not it also carries on insurance business of any other kind).
- (2) Subject as follows, the profits of the life assurance business for any accounting period shall be charged to tax under the I minus E basis.
- (3) Where in the case of an insurance company for an accounting period either—
- (a) all of its life assurance business is reinsurance business and none of that business is of a type excluded from this subsection by regulations made by the Board, or
- (b) all, or substantially all, of its life assurance business is gross roll-up business,
the profits of that business for the accounting period shall be charged to tax under section 35 of CTA 2009 (charge on trade profits) and not otherwise.
- (4) Where—
- (a) the profits of the life assurance business of an insurance company for any accounting period are charged to tax under the I minus E basis, and
- (b) had those profits been charged to tax under section 35 of CTA 2009, a loss would have arisen to the company from that business for the period,
the loss (after being reduced in accordance with section 434A(2)(a)) may be relieved under section 37 of CTA 2010 or under Chapter 4 of Part 5 of that Act.
- (5) The application, in relation to the life assurance business of an insurance company, of any of the life assurance trade profits provisions is not to be taken—
- (a) to prevent the application of the I minus E basis in relation to that business of the company for any accounting period, or
- (b) to affect the operation of the I minus E basis in relation to the that business of the company for any accounting period except as specifically provided by the Corporation Tax Acts.
##### 431H
- (1) This section applies in relation to an insurance company which carries on life assurance business and insurance business of any other kind.
- (2) For the purposes of the Corporation Tax Acts—
- (a) the life assurance business, and
- (b) the other insurance business,
are to be treated as separate businesses.
- (3) The profits of the other insurance business shall be charged to tax under section 35 of CTA 2009 (charge on trade profits) as the profits of a separate trade.
- (4) But subsection (3) above does not apply where that business is mutual business.
- (5) As to the profits of the life assurance business, see section 431G.
##### 432YA
- (1) This section applies in the case of—
- (a) a company which is a non-profit company, or
- (b) the non-profit fund of a company which is not a non-profit company,
if an amount (“*the relevant amount*”) is shown in paragraph 4(12) of Appendix 9.4 to the periodical return for the company for a period of account which ends on or after 31st December 2006 but before 1st January 2009 (a “relevant period of account”).
- (2) In computing profits of PHI business in accordance with the provisions applicable for the purposes of section 35 of CTA 2009 (charge on trade profits)—
- (a) X shall be added to the closing long term business provision of the company for the relevant period of account; and
- (b) XA shall be brought into account as a trading receipt of the company for each subsequent period of account until the total sum of the amounts so bought into account is equal to X (and if that total sum would otherwise exceed X, the excess shall be ignored).
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2B) X is—
- (a) where the relevant period of account ends before 1st April 2007, the whole of the relevant amount;
- (b) where the relevant period of account ends on or after 1st April 2007 but before 1st January 2008, two-thirds of the relevant amount;
- (c) where the relevant period of account ends on or after 1st January 2008, one-third of the relevant amount.
- (2C) XA is the amount found by applying the following formula—
$$Y12×Z$Here—Y is the number of months of the period of account in question (part of a month being counted as a month); andZ is—(a) where X is the whole of the relevant amount, one-third of X;(b) where X is two thirds of the relevant amount, one-half of X;(c) where X is one third of the relevant amount, the whole of X.$
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section—
- “*long term business provision*” has the same meaning as in Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) This section is subject to sections 82E and 82F of the Finance Act 1989 (treatment of transferors and transferees under insurance business transfer schemes) and those sections shall apply in relation to this section as if—
- (a) any reference in them to a provision of section 82D of that Act (treatment of profits: life assurance – adjustment consequent on change in Insurance Prudential Sourcebook) were a reference to the corresponding provision of this section,
- (b) the reference in section 82E(4) to life assurance business were a reference to PHI business, and
- (c) the reference in section 82E(7) to the life assurance trade profits provisions were a reference to the provisions applicable for the purposes of section 35 of CTA 2009.
##### 432ZA
- (1) In this Chapter “*linked assets*” means assets of an insurance company which are identified in its records as assets by reference to the value of which benefits provided for under a policy or contract are to be determined and in a case where only part of an asset is so identified, references to a linked asset are references to that part.
- (2) Linked assets shall be taken—
- (a) to be linked to long-term business of a particular category if the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category; and
- (b) to be linked solely to long-term business of a particular category if all (or all but an insignificant proportion) of the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category.
- (3) Where an asset is linked to more than one category of long-term business, a part of the asset shall be taken to be linked to each category; and references in this Chapter to assets linked (but not solely linked) to any category of business shall be construed accordingly.
- (4) Where subsection (3) above applies, the part of the asset linked to any category of business shall be a proportion determined as follows—
- (a) where in the records of the company values are shown for the asset in funds referable to particular categories of business, the proportion shall be determined by reference to those values;
- (b) in any other case the proportion shall be equal to the proportion A/B where—
A is the total of the linked liabilities of the company which are liabilities of the internal linked fund in which the asset is held and are referable to that category of business;
B is the total of the linked liabilities of the company which are liabilities of that fund.
- (5) For the purposes of sections 432A to 432E—
- (a) income arising in any period from assets linked but not solely linked to a category of business,
- (b) gains arising in any period from the disposal of such assets, and
- (c) increases and decreases in the value of such assets,
shall be treated as arising to that category of business in the proportion which is the mean of the proportions determined under subsection (4) above at the beginning and end of the period.
- (6) In this section—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*linked liabilities*” means liabilities in respect of benefits to be determined by reference to the value of linked assets.
- (7) In the case of a policy or contract the effecting of which constitutes a class of life assurance business the fact that it also constitutes PHI business shall be disregarded for the purposes of this section unless the benefits to be provided which constitute PHI business are to be determined by reference to the value of assets.
##### 432AA
- (1) An insurance company is treated (despite sections 205 and 206 of CTA 2009) as carrying on separate UK property businesses or overseas property businesses, in accordance with the following rules.
- (2) The exploitation of land held as an asset of the company’s long-term insurance fund is treated as a separate business from the exploitation of land not so held.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The exploitation of land held as an asset linked to any of the following categories of business is regarded as a separate business—
- (a) basic life assurance and general annuity business;
- (b) gross roll-up business; and
- (c) PHI business.
- (5) Accordingly, the exploitation of land held as an asset of the company’s long-term insurance fund otherwise than as mentioned in subsection . . . (4) is treated as a separate business from any other.
- (6) In this section “*land*” means any estate, interest or rights in or over land.
##### 432AB
- (1) This section applies to any loss arising in a UK property business or overseas property business.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) So far as a loss is referable to basic life assurance and general annuity business, it shall be treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section.
- (4) Where a company is treated under section 432AA as carrying on—
- (a) more than one UK property business, or
- (b) more than one overseas property business,
then, in relation to either kind of business, the reference in subsection (3) above to a loss referable to basic life assurance and general annuity business shall be construed as a reference to any aggregate net loss after setting the losses from those businesses which are so referable against any profits from those businesses that are so referable.
- (5) The provisions of Chapter 4 of Part 4 of CTA 2010 (loss relief: property losses) do not apply to a loss referable to life assurance business or any category of life assurance business.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257B
##### 432CA
- (1) This section applies where—
- (a) an insurance company is not a non-profit company in relation to a period of account (“the current period of account”),
- (b) in the case of any business with which an account of the company for the current period of account is concerned (“the relevant business”), an amount is a relevant brought into account amount for that period of account (see subsection (2)),
- (c) section 432C applies for determining the extent to which the relevant brought into account amount is referable to life assurance business or to gross roll-up business, and
- (d) the line 51 reduction condition is met (see subsection (3)).
- (2) An amount is a relevant brought into account amount for a period of account if—
- (a) it is brought into account as mentioned in subsection (2)(b) of section 83 of the Finance Act 1989 (increases in value of non-linked assets) for that period,
- (b) it is deemed to be brought into account for that period by subsection (2B) of that section in consequence of the transfer of non-linked assets, or
- (c) it is taken into account under subsection (2) of that section for that period by virtue of section 444AB as being the relevant amount in relation to non-linked assets.
- (3) The line 51 reduction condition is met if—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for the current period of account, is less than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant reduction”.
- (4) Section 432C applies in relation to so much of the relevant brought into account amount as does not exceed the relevant reduction (“the affected amount”) as if it were brought into account as an increase in the value of assets in the case of the relevant business for the applicable appropriate period of account of the company.
- (5) A period of account is an “appropriate period of account” if it ended before the current period of account and—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for it, was more than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant increase.”
- (6) The “applicable” appropriate period of account is the one which ended most recently (“the most recent appropriate period of account”).
- (7) But if the relevant increase in the case of the most recent appropriate period of account is less than the affected amount, the most recent appropriate period of account is the applicable appropriate period of account in relation to only so much of the affected amount as does not exceed that relevant increase.
- (8) In that case, the appropriate period of account which ended most recently before the most recent appropriate period of account is the applicable appropriate period of account in relation to so much of the remainder as does not exceed the relevant increase in the case of that appropriate period of account (and, where necessary, so on until the applicable appropriate period of account is established in relation to all of the affected amount or there are no more appropriate periods of account).
- (9) If the current period of account is not the first in relation to which this section has applied in the case of the business concerned, the amount of the relevant increase in the case of any appropriate period of account (“*the period in question*”) is to be treated as reduced by the relevant aggregate.
- (10) The “relevant aggregate” is the aggregate of so much of the affected amount for any period or periods of account earlier than the current period of account as was an amount to which section 432C applied as if it were brought into account as mentioned in subsection (4) for the period in question.
- (11) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
##### 432CB
- (1) This section applies where, under an insurance business transfer scheme, there is a transfer of long-term business—
- (a) from a non-profit fund of an insurance company (“*the transferor*”) which is not a non-profit company in relation to the relevant period of account,
- (b) to another insurance company (“*the transferee*”) to constitute or form part of a non-profit fund of the transferee (“*the transferee's non-profit fund*”),
(“*the transfer*”) and conditions A and B are met.
- (2) Condition A is that the fair value of the assets transferred by the transfer exceeds by an amount (“the chargeable excess”) the amount of the relevant liabilities transferred by the transfer.
For this purpose “relevant” liabilities are liabilities of a type shown (or treated as shown) in any of lines 14, 17, 21 to 23 and 31 to 38 of Form 14 of a periodical return of an insurance company.
- (3) Condition B is that the main purpose, or one of the main purposes, of the transferor or the transferee (or both) in entering into any part of the transfer scheme arrangements is to secure a reduction in tax as a result of section 432C having effect in the case of the transferee, rather than the transferor, in relation to the business transferred by the transfer.
- (4) The chargeable excess is to be brought into account by the transferor as mentioned in section 83(2)(b) of the Finance Act 1989 for the relevant period of account.
- (5) Where there is no amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first period of account of the transferee ending on or after the transfer date (“the first post-transfer period of account”), the chargeable excess is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the first post-transfer period of account.
- (6) Where—
- (a) there is an amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first post-transfer period of account, and
- (b) the amount so shown in column 1 of line 51 of Form 14 of the periodical return of the transferee for that period of account, or for any other period of account of the transferee ending after the transfer date, (an “affected period of account”) is less than the total chargeable excess amount,
the relevant amount is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the affected period of account.
- (7) For this purpose “the relevant amount” is the amount by which—
- (a) the amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the affected period of account, is less than
- (b) the total chargeable excess amount less any amount brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for any earlier period of account by virtue of the operation of this section in relation to the transferee's non-profit fund.
- (8) In subsections (6) and (7) “*the total chargeable excess amount*” means the aggregate of—
- (a) the chargeable excess, and
- (b) any amount which is the chargeable excess in relation to any other transfer of business to the transferee's non-profit fund.
- (9) In this section “*the relevant period of account*” means—
- (a) the period of account of the transferor ending immediately before the transfer date, or
- (b) if no period of account of the transferor so ends, the period of account of the transferor covering the transfer date.
- (10) In this section “*the transfer scheme arrangements*” means the insurance business transfer scheme and any relevant associated operations; and for this purpose “*relevant associated operations*” means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance, or
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee,
which is effected in connection with the insurance business transfer scheme.
- (11) In subsection (10)—
- “dependant”, and
- “insurance undertaking”,
have the same meaning as in the Insurance Prudential Sourcebook.
- (12) In this section “*the transfer date*” means the date on which the insurance business transfer scheme takes effect.
- (13) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
#### Special rule for computing chargeable profits.
##### 432F
- (1) The provisions of this section provide for the reduction of the amount determined in accordance with section 432E(3) (“the subsection (3) figure”) for an accounting period in which that amount exceeds, or would otherwise exceed, the amount determined in accordance with section 432E(2) (“the subsection (2) figure”).
- (2) . . . There shall be determined for each accounting period the amount (if any) by which the subsection (2) figure . . . exceeds the subsection (3) figure (“the subsection (2) excess”).
- (3) Where there is a subsection (2) excess, the amount shall be carried forward and if in any subsequent accounting period the subsection (3) figure exceeds, or would otherwise exceed, the subsection (2) figure, it shall be reduced by the amount or cumulative amount of subsection (2) excesses so far as not previously used under this subsection.
- (4) Where in an accounting period that amount is greater than is required to bring the subsection (3) figure down to the subsection (2) figure, the balance shall be carried forward and aggregated with any subsequent subsection (2) excess for use in subsequent accounting periods.
##### 432G
- (1) There is referable to the life assurance business of the transferee the appropriate fraction of the amount brought into account as a business transfer-in and of any amount taken into account as profits under section 444ABD(1).
- (2) For the purposes of subsection (1) above “the appropriate fraction” is—
$$LABLTL$where—LABL is the amount of the liabilities transferred that are referable to the life assurance business (but is nil if it would otherwise be below nil); andTL is the whole of the liabilities transferred.$
- (3) But if the amount of the liabilities transferred is nil, the appropriate fraction for the purposes of subsection (1) above is such fraction as is just and reasonable.
- (4) There is referable to the gross roll-up business of the transferee the relevant fraction of the amount brought into account as a business transfer-in and of any amount taken into account as profits under section 444ABD(1).
- (5) For the purposes of subsection (4) above “the relevant fraction” is—
$$GRBLTL$where—GRBL is the amount of the liabilities transferred that are referable to the gross roll-up business (but is nil if it would otherwise be below nil); andTL has the same meaning as in subsection (2) above.$
- (6) But if the amount of the liabilities transferred is nil, the relevant fraction for the purposes of subsection (4) above is such fraction as is just and reasonable.
### Miscellaneous provisions relating to life assurance business
##### 434AZA
- (1) Where this section applies in the case of a company carrying on life assurance business, relief allowable under section 37 of CTA 2010, or under Part 5 of that Act, in respect of losses incurred by the company in the life assurance business in an accounting period is reduced in accordance with section 434AZB.
- (2) This section applies in the case of a company where—
- (a) there has been a relevant addition to one or more non-profit funds in a period of account ending no later than the accounting period (“the relevant period of account”) (see subsection (3)),
- (b) the company is not a non-profit company in relation to the relevant period of account and has not elected under subsection (9) of section 83YA of the Finance Act 1989 to be treated for the purposes of that section as if it were, and
- (c) condition A or B is met,
and, if the relevant period of account is not the period of account ending with the accounting period (“the current period of account”), condition C is also met.
- (3) For the purposes of subsection (2), there is a relevant addition to a non-profit fund in the relevant period of account if an amount is shown as a transfer from non-technical account in line 32 of the Form 58 of the non-profit fund in the periodical return for that period of account.
- (4) Condition A is that there is a relevant book value election in relation to assets of a non-profit fund of the company.
- (5) For the purposes of subsection (4), there is a relevant book value election in relation to assets of a non-profit fund if an amount is shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account.
- (6) Condition B is that the company is party to arrangements the main purpose, or one of the main purposes, of which is to reduce the relevant admissible value of assets of a non-profit fund of the company, other than any structural assets.
- (7) For the purposes of subsection (6) (and section 434AZB), the “*relevant admissible value*” means the value reflected in line 89 of Form 13 of the periodical return for the current period of account.
- (8) Condition C is that the surplus arising since the last valuation shown in line 34 of the Form 58 of the non-profit fund, or any of the non-profit funds, in relation to which condition A or B is met in the periodical return for the current period of account is a negative amount.
#### Reduction in chargeable profits for certain financing income
##### 434AZB
- (1) The amount of the relief allowable as mentioned in section 434AZA(1) is reduced by whichever of the following is the least—
- (a) the amount of the loss,
- (b) the amount specified in subsection (2), and
- (c) the amount specified in subsection (4).
- (2) The amount mentioned in subsection (1)(b) is—
- (a) where only condition A in section 434AZA is met, the relevant amount relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant amounts relating to them,
- (b) where only condition B is met, the amount of the relevant reduction relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant reductions relating to them, and
- (c) where both condition A and condition B are met, the aggregate of the amounts in paragraphs (a) and (b).
- (3) In subsection (2)—
- (a) “*relevant amount*”, in relation to a non-profit fund, means the amount shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account (as reduced by any amount which has had effect to reduce relief for losses for a previous accounting period), and
- (b) “*relevant reduction*”, in relation to a non-profit fund, means the reduction of the relevant admissible value of assets of the non-profit fund (other than structural assets) which is attributable to the arrangements (as so reduced).
- (4) The amount mentioned in subsection (1)(c) is—
- (a) if the relevant period of account is the current period of account, the amount referred to in section 434AZA(3) in the case of the non-profit fund, or of each of the non-profit funds, to which there has been a relevant addition in the relevant period of account, and
- (b) otherwise, so much of the amount shown in line 31 of the Form 58 of the non-profit fund or non-profit funds in the periodical return for the current period of account as is attributable to the amount so referred to.
##### 434AZC
- (1) For the purposes of sections 434AZA and 434AZB, a non-profit fund required to support a with-profits fund is to be treated as not being a non-profit fund.
- (2) Sections 434AZA and 434AZB apply to a non-profit part of a with-profits fund as if references to something shown in the Form 14 or Form 58 of the non-profit fund in a periodical return were to what would be so shown if there were a Form 14 or Form 58 of the non-profit part of the with-profits fund in the periodical return.
- (3) In sections 434AZA and 434AZB—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
- “*structural assets*” has the same meaning as in section 83XA of the Finance Act 1989 (see subsection (3) of that section and any regulations made under it).
##### 434B
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 436A
- (1) The charge to corporation tax on income applies to profits arising to an insurance company from gross roll-up business.
- (2) For that purpose—
- (a) the gross roll-up business is to be treated separately, and
- (b) the profits from it are to be computed in accordance with the life assurance trade profits provisions.
- (3) In making that computation, sections 82 and 82B to 83AB 83ZA of the Finance Act 1989 apply with the necessary modifications.
- (4) If in any accounting period an insurance company incurs a loss, to be computed on the same basis as the profits, arising from its gross roll-up business—
- (a) the loss must be set off against the amount of any profits chargeable under this section for any subsequent accounting period, and
- (b) accordingly, the amount of the company's profits so charged in any such accounting period is to be treated as reduced by the amount of the loss or so much of that amount as cannot be relieved under this section against profits of an earlier accounting period.
- (5) Section 91 of CTA 2010 does not apply to a loss incurred by an insurance company on its gross roll-up business.
- (6) No loss to which section 91 of CTA 2010 applies may be set off . . . against the amount of any profits chargeable under this section.
- (7) This section does not apply in relation to an insurance company for an accounting period if the profits of its long-term business for the accounting period are charged to tax under section 35 of CTA 2009 (charge on trade profits).
##### 436B
- (1) Gains referable to gross roll-up business are not chargeable gains.
- (2) For the purposes of this section “*gains referable to gross roll-up business*” means gains which—
- (a) accrue to an insurance company on the disposal by it of assets of its long-term insurance fund, and
- (b) are referable (in accordance with section 432A) to gross roll-up business.
##### 437A
- (1) For the purposes of section 437 an annuity is a steep-reduction annuity if—
- (a) the amount of any payment in respect of the annuity (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives;
- (b) the annuitant is entitled in respect of the annuity to payments of different amounts at different times; and
- (c) those payments include a payment (“*a reduced payment*”) of an amount which is substantially smaller than the amount of at least one of the earlier payments in respect of that annuity to which the annuitant is entitled.
- (2) Where there are different intervals between payments to which an annuitant is entitled in respect of any annuity, the question whether or not the conditions in subsection (1)(b) and (c) above are satisfied in the case of that annuity shall be determined by assuming—
- (a) that the annuitant’s entitlement, after the first payment, to payments in respect of that annuity is an entitlement to payments at yearly intervals on the anniversary of the first payment; and
- (b) that the amount to which the annuitant is assumed to be entitled on each such anniversary is equal to the annuitant’s assumed entitlement for the year ending with that anniversary.
- (3) For the purposes of subsection (2) above an annuitant’s assumed entitlement for any year shall be determined as follows—
- (a) the annuitant’s entitlement to each payment in respect of the annuity shall be taken to accrue at a constant rate during the interval between the previous payment and that payment; and
- (b) his assumed entitlement for any year shall be taken to be equal to the aggregate of the amounts which, in accordance with paragraph (a) above, are treated as accruing in that year.
- (4) In the case of an annuity to which subsection (2) above applies, the reference in section 437(1CB)(a) to the making of a reduced payment shall be construed as if it were a reference to the making of a payment in respect of that annuity which (applying subsection (3)(a) above) is taken to accrue at a rate that is substantially less than the rate at which at least one of the earlier payments in respect of that annuity is taken to accrue.
- (5) Where—
- (a) any question arises for the purposes of this section whether the amount of any payment in respect of any annuity—
- (i) is substantially smaller than the amount of, or
- (ii) accrues at a rate substantially less than,
an earlier payment in respect of that annuity, and
- (b) the annuitant or, as the case may be, every annuitant is an individual who is beneficially entitled to all the rights conferred on him as such an annuitant,
that question shall be determined without regard to so much of the difference between the amounts or rates as is referable to a reduction falling to be made as a result of the occurrence of a death.
- (6) Where the amount of any one or more of the payments to which an annuitant is entitled in respect of an annuity depends on any contingency, his entitlement to payments in respect of that annuity shall be determined for the purposes of section 437(1CA) to (1CC) and this section according to whatever (applying any relevant actuarial principles) is the most likely outcome in relation to that contingency.
- (7) Where any agreement or arrangement has effect for varying the rights of an annuitant in relation to a payment in respect of any annuity, that payment shall be taken, for the purposes of section 437(1CA) to (1CC) and this section, to be a payment of the amount to which the annuitant is entitled in accordance with that agreement or arrangement.
- (8) References in this section to a contingency include references to a contingency that consists wholly or partly in the exercise by any person of any option.
##### 438B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 438C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 439A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 439B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 440B
- (1) The following provisions apply where the profits of a company’s life assurance business are charged to tax under section 35 of CTA 2009 (charge on trade profits)in accordance with section 431G(3).
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subsection (1) of section 440 applies as if the only categories set out in subsection (4) of that section were—
- (a) assets of the long-term insurance fund, and
- (b) other assets.
- (4) Section 440A applies as if for paragraphs (a), (d) and (e) of subsection (2) there were substituted—
- (“) so many of the securities as are included in the company's long-term insurance fund shall be treated for the purposes of corporation tax as a separate holding which is an asset of that fund, and
- (b) any remaining securities shall be treated for those purposes as a separate holding which is not of the description mentioned in the preceding paragraph.”.
- (4A) Section 440(2) does not apply if either the transferor or the company by which the asset is acquired is a company whose profits are charged to tax under section 35 of CTA 2009 (or if they both are).
- (4B) Section 211 of the 1992 Act does not apply in relation to assets which are referable to the life assurance business of the transferor if the transferor is a company whose profits are charged to tax under section 35 of CTA 2009.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 440C
- (1) Subsection (2) makes provision for a case where—
- (a) subsection (4) of section 431G applies in relation to the profits of the life assurance business of an insurance company for any accounting period, but
- (b) the profits of that business for a succeeding accounting period fall to be charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of subsection (3) of that section.
- (2) The loss referred to in section 431G(4)(b) (less any loss for the same accounting period set off under section 436A for any intervening accounting period and any amount deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989) may be relieved under section 45 of CTA 2010 against profits of that succeeding accounting period (without being reduced in accordance with section 434A(2)(a)).
- (3) In determining whether any loss has been set off under section 436A for any intervening accounting period, or whether any amount has been deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989, losses of earlier accounting periods are to be assumed to be set off before those of later accounting periods.
- (4) Subsection (5) makes provision for a case where—
- (a) a loss arises to an insurance company for an accounting period for which the profits of its life assurance business fall to be charged to tax under section 35 of CTA 2009 by virtue of section 431G(3)(b),
- (b) the profits of that business for a subsequent accounting period are charged to tax under the I minus E basis, and
- (c) had those profits (instead) been charged to tax under section 35 of CTA 2009, any of that loss would have been available to be set off against them under section 45 of CTA 2010.
- (5) The loss is to be treated for the purposes of the operation of section 436A in relation to the subsequent accounting period as if it were a loss arising from its gross roll-up business in the accounting period in which it arose.
- (6) Subsections (7) and (8) make provision for a case where—
- (a) the profits of the life assurance business of an insurance company for an accounting period are charged to tax under the I minus E basis,
- (b) the profits of that business for its next accounting period fall to be charged to tax under section 35 of CTA 2009 by virtue of section 431G(3), and
- (c) that prevents the giving of relief in accordance with section 86(8) of the Finance Act 1989 (acquisition expenses relieved in fractions under section 76).
- (7) Any relief which would have been so given in—
- (a) the next accounting period, or
- (b) any subsequent accounting period for which the profits of the company's life assurance business continue to be charged to tax under section 35 of CTA 2009,
may be given by set-off against any gains treated as accruing under section 213(1) of the 1992 Act at the end of the accounting period.
- (8) But if the profits of the company's life assurance business for a subsequent accounting period are charged to tax under the I minus E basis, any relief not previously given under subsection (7) is to be treated for the purposes of the operation of section 76 in relation to the first subsequent accounting period for which profits are so charged as if it were an amount which is to be relieved under that section by virtue of section 86(8) and (9) of the Finance Act 1989.
#### Special rule for computing chargeable profits.
##### 440D
Schedule 19ABA (which makes modifications of this Act in relation to BLAGAB group reinsurers) shall have effect.
##### 441B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 442A
- (1) Where an insurance company reinsures any risk in respect of a policy or contract attributable to its basic life assurance and general annuity business, the investment return on the policy or contract shall be treated as accruing to the company while the risk remains reinsured by the company under the reinsurance arrangement and shall be charged to tax under the charge to corporation tax on income.
- (2) The Board may make provision by regulations as to the amount of investment return to be treated as accruing in each accounting period during which the reinsurance arrangement is in force.
- (3) The regulations may, in particular, provide that the investment return to be treated as accruing to the company in respect of a policy or contract in any accounting period shall be calculated by reference to—
- (a) the aggregate of the sums paid by the company to the reinsurer during that accounting period and any earlier accounting periods by way of premium or otherwise;
- (b) the aggregate of the sums paid by the reinsurer to the company during that accounting period and any earlier accounting periods by way of commission or otherwise;
- (c) the aggregate amount of the net investment return treated as accruing to the company in any earlier accounting periods, that is to say, net of tax at such rate as may be prescribed; and
- (d) such percentage rate of return as may be prescribed.
- (3A) Where a transfer of the reinsurance arrangement from one insurance company (“*the transferor*”) to another (“*the transferee*”) is effected by novation or an insurance business transfer scheme, for the purpose of calculating the investment return to be treated as accruing to the transferee in respect of the policy or contract after the transfer, the references to the company in subsection (3)(a), (b) and (c) above include (as well as the transferee)—
- (a) the transferor, and
- (b) any insurance company from which the reinsurance arrangement was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.
- (4) The regulations shall provide that the amount of investment return to be treated as accruing . . . in respect of a policy or contract in the final accounting period during which the policy or contract is in force is the amount, ascertained in accordance with regulations, by which the profit over the whole period during which the policy or contract, and the reinsurance arrangement, were in force exceeds the aggregate of the amounts treated as accruing in earlier accounting periods.
- (5) Regulations under this section—
- (a) may exclude from the operation of this section such descriptions of insurance company, such descriptions of policies or contracts and such descriptions of reinsurance arrangements as may be prescribed;
- (b) may make such supplementary provision as to the ascertainment of the investment return to be treated as accruing to the company as appears to the Board to be appropriate, including provision requiring payments made during an accounting period to be treated as made on such date or dates as may be prescribed; and
- (c) may make different provision for different cases or descriptions of case.
- (6) In this section “*prescribed*” means prescribed by regulations under this section.
##### 444AZA
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax in respect of that business under the I minus E basis,
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of section 431G(3), and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) Any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits chargeable under section 436A (a “qualifying loss of the transferor”) shall instead be treated as a loss of the transferee . . . available to be set off against GRBP in relation to a period of account.
- (3) For the purposes of subsection (2) above “*GRBP*”, in relation to a period of account, is—
$P×GRBTLTL$
where—
- *P* is the amount of such profits of the transferee's life assurance business for the period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable),
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of any qualifying loss of the transferor to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined in the same manner as an appeal, and both the transferor and transferee shall be entitled to be a party to any proceedings.
#### Reduction in chargeable profits: failure to qualify for exemptions
##### 444AZB
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of section 431G(3),
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax under the I minus E basis, and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) The relevant fraction of any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits of that business (a “qualifying loss of the transferor”) shall instead be treated as a loss of the transferee . . . available to be set off against the amount of such profits chargeable under section 436A for a period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable).
- (3) For the purposes of subsection (2) above “*the relevant fraction*”, in relation to a period of account, is—
$GRBTLTL$
where—
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of the amount of any qualifying loss of the transferor to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined in the same manner as an appeal, and both the transferor and transferee shall be entitled to be a party to any proceedings.
##### 444AA
- (1) This section applies where the whole of the long-term business of a person (“*the transferor*”) is transferred from that person–
- (a) by one insurance business transfer scheme, or
- (b) by two or more insurance business transfer schemes which take effect on the same date.
- (2) Where (apart from this subsection) there would not be a periodical return of the transferor covering a period ending immediately before the transfer date, there is to be deemed for the purposes of corporation tax to be a periodical return of the transferor covering the period—
- (a) beginning immediately after the last period ending before the transfer date which is covered by a periodical return of the transferor, and
- (b) ending immediately before the transfer date.
- (3) The periodical return deemed to exist by subsection (2) above is to be deemed to contain—
- (a) such entries as would be included in an actual periodical return of the transferor covering the period mentioned in subsection (2) above, and
- (b) such entries as would be included in an actual periodical return of the transferor covering the period—
- (i) beginning immediately after the end of the period mentioned in subsection (2) above, and
- (ii) ending immediately before the transfer had effect,
and the period mentioned in subsection (2) above is to be deemed to be a period of account (but not an accounting period) of the transferor.
- (4) There is to be deemed for the purposes of corporation tax to be a periodical return of the transferor—
- (a) covering the transfer date, and
- (b) containing the appropriate entries.
- (5) In subsection (4) above “*appropriate entries*” means such entries as would be included in an actual periodical return covering the transfer date—
- (a) in line 32 of Form 40, and
- (b) in line 11 of Form 14, in both columns (treating references in that form to “current year” as references to the time immediately after the transfer date and to “previous year” as references to the time immediately before the transfer date).
- (6) A transfer date covered by a periodical return deemed to exist by subsection (4) above is to be deemed to be a period of account of the transferor only for the purpose of taking into account profits under section 444ABD.
- (7) Where—
- (a) a periodical return deemed to exist by subsection (4) above is preceded by an actual periodical return of the transferor covering the period immediately before the transfer date, and
- (b) profits are to be taken into account under section 444ABD in the period of account deemed to exist by subsection (6) above,
those profits are to be deemed for the purposes of corporation tax to be profits arising on the last day of the period of account covered by the actual periodical return.
- (8) Any actual periodical return of the transferor covering a period which includes the transfer date is to be ignored for the purposes of corporation tax.
- (9) In this section and sections 444AB to 444AECC “*the transfer date*”, in relation to an insurance business transfer scheme, means the date on which it takes effect.
##### 444AB
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer long-term business of a person (“*the transferor*”) to another person (“*the transferee*”), and
- (b) condition A or condition B is met.
- (2) Condition A is met if any of the assets of the transferor's long-term insurance fund which are transferred . . . by the insurance business transfer scheme are not, immediately after their transfer—
- (a) if the transferee is an insurance company or an insurance special purpose vehicle, assets of the transferee's long-term insurance fund, or
- (b) if the transferee is not an insurance company , an insurance special purpose vehicleor a friendly society, assets of a fund of the transferee which would be a with-profits fund if the transferee were an insurance company,
(“relevant non-transferred assets”).
- (3) Condition B is met if, immediately after the transfer date, the transferor—
- (a) does not carry on long-term business, but
- (b) holds any assets which, immediately before the transfer date, were assets of its long-term insurance fund (“retained assets”).
- (4) If there are relevant non-transferred assets or retained assets (or both) the relevant amount in relation to them (see subsection (5) below) is to be taken into account under section 83(2) of the Finance Act 1989 as an increase in value of the assets of the long-term insurance fund of the transferor for the relevant period of account (see subsection (6) below).
- (5) Section 444ABA makes provision for the calculation of the relevant amount in relation to relevant non-transferred assets; and section 444ABB makes provision for its calculation in relation to retained assets.
- (5A) In this section references to assets held by the transferor after the transfer do not include—
- (a) assets held on trust for the transferee, or
- (b) assets held to meet liabilities which have been wholly reinsured and which are intended to be transferred under an insurance business transfer scheme to the reinsurer.
- (6) In this section and sections 444ABA to 444AC “*the relevant period of account*” means the period of account of the transferor ending, or treated by section 444AA(2) as ending, immediately before the transfer date.
- (7) See section 444AA for the meaning of “the transfer date” in this section.
- (8) For the purpose of paragraph (2)(a), in relation to an insurance special purpose vehicle which is not an insurance company, “*long-term insurance fund*” has the meaning it has in paragraph 4(5) of Schedule 19ABA.
##### 444ABA
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are relevant non-transferred assets is—
$$FVA-BTO$where—FVA is the fair value of the assets on the transfer date, andBTO is the lesser of ABTO and AL13, where—ABTO is any amount brought into account in respect of the assets as a business transfer-out and shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor for the period of account of the transferor including the transfer date, andAL13 is any positive amount shown (or treated as shown) in line 13 of Form 14 in the periodical return for the last period of account of the transferor ending before the transfer date.$
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) See section 444AA for the meaning of “the transfer date”. . . in this section.
##### 444ABAA
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are non-profit fund transferred assets is—
$$FVA-(ABTO+TL)$where—FVA is the fair value of the assets on the transfer date,ABTO is any amount brought into account in respect of the assets as a business transfer-out and shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor for the period of account of the transferor including the transfer date, andTL is the amount of any non-profit fund transferred liabilities which are shown (or treated as shown) in any of lines 17, 21 to 23 and 31 to 38, but not in line 61, in Form 14 in the periodical return for the period of account of the transferor ending (or treated as ending by section 444AA) immediately before the transfer date or, if there is no period of account of the transferor so ending (or treated as so ending), the amount of any liabilities which would be so shown if one did.$
- (2) In subsection (1) “*non-profit fund transferred liabilities*” means such of the liabilities of the transferor's long-term insurance fund as are transferred from the transferor to the transferee by the insurance business transfer scheme and were, immediately before their transfer, liabilities of a non-profit fund of the transferor.
- (3) See section 444AA for the meaning of “the transfer date” in this section.
#### Loan relationships etc.
##### 444ABB
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are retained assets is—
$FVA-ABDP-RL13-RRL$
where—
- FVA is the fair value of the assets on the transfer date,
- ABDP is the amount of the profits to be taken into account as profits under section 444ABD,
- RL13 is the amount by which AL13 exceeds VE, and
- RRL is the value of any relevant retained liabilities immediately after the transfer date.
But the relevant amount is nil if it would otherwise be below nil.
- (1A) For the purposes of subsection (1) above—
- (a) AL13 is any positive amount shown (or treated as shown) in line 13 of Form 14 in the periodical return for the last period of account of the transferor ending before the transfer date;
- (b) VE is the amount (if any) by which VL32 exceeds VTL where—
- (i) VL32 is the value of the assets shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor covering (or treated as covering) the transfer date, and
- (ii) VTL means the amount of the mathematical reserves (as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook) transferred by the insurance business transfer scheme; and
- (c) relevant retained liabilities are any liabilities of the company's long-term business which are owed by the company immediately after the transfer date and are shown (or treated as shown) in any of lines 17, 21 to 23 and 31 to 38 in Form 14 in a periodical return for the period of account ending (or treated as ending by section 444AA) immediately before the transfer date.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABBA
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If the transferor and the transferee jointly elect, the transferee (and not the transferor) is chargeable to any amount of additional corporation tax to which the transferor would otherwise be chargeable by virtue of section 444AB(4) in relation to relevant non-transferred assets.
- (3) An election under subsection (2) above—
- (a) is to be irrevocable, and
- (b) is to be made by notice to an officer of Revenue and Customs no later than the end of the period of 90 days beginning with the day following the transfer date,
and a copy of the notice containing the election must accompany the tax return of the transferee for the first accounting period ending after the transfer. Paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.
- (4) Where an election under subsection (2) above has been made, the transferor must inform the transferee of—
- (a) the amount of any additional corporation tax to which the transferor considers the election to apply, and
- (b) the day on which that tax is due and payable,
no later than the end of the period of 8 months beginning with the day following the transfer date.
- (5) Tax chargeable on the transferee by virtue of an election under subsection (2) above—
- (a) is due in accordance with section 59D of the Management Act on the day on which it would have been due if no election had been made, and
- (b) for the purposes of that section, is to be treated as tax payable by the transferor (and not as tax payable by the transferee).
- (6) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444ABD
- (1) Any profits representing the amount by which—
- (a) the amount of the mathematical reserves (as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook) transferred by an insurance business transfer scheme, exceeds
- (b) the value of the assets transferred by the insurance business transfer scheme shown (or treated as shown) in line 32 of Form 40 of the periodical return of the transferor for the period of account of the transferor including the transfer date,
are to be taken into account as profits of that period of account in accordance with subsections (1A) and (1C) below.
- (1A) Where the profits of the life assurance business of the transferor for a period of account are charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of section 431G(3), the appropriate fraction of the amount of the profits to which subsection (1) above applies is to be taken into account as profits of that period of account chargeable to tax under section 35 of that Act (and not otherwise).
- (1B) For the purposes of subsection (1A) above “the appropriate fraction” is the appropriate fraction for the purposes of section 432G(1).
- (1C) Where the profits of the life assurance business of the transferor for a period of account are charged to tax under the I minus E basis, the relevant fraction of the amount of the profits to which subsection (1) above applies is to be taken into account as profits of that period of account chargeable to tax under section 436A (and not otherwise).
- (1D) For the purposes of subsection (1C) above “the relevant fraction” is the relevant fraction for the purposes of section 432G(4).
- (1E) Where the value mentioned in paragraph (b) of subsection (1) above exceeds the amount mentioned in paragraph (a) of that subsection, the amount of the excess is not to be taken into account as a loss of the transferor.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AC
- (1) This section applies where an insurance business transfer scheme has effect to transfer . . . long-term business of a person (“*the transferor*”) to another person (“*the transferee*”) and the condition in subsection (2) below is met.
- (2) The condition is that the transferor did not carry on life assurance business that is mutual business during the relevant period of account.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The amount which (apart from this section) would be regarded as other income of the transferee for the purposes of section 83(2)(e) of the Finance Act 1989 for the period of account of the transferee which includes the transfer date is to be reduced by an amount equal to the lesser of the transferred surplus and any positive amount shown (or treated as shown) in line 13 of Form 14 in the periodical return for the last period of account of the transferor ending before the transfer date.
- (5) In subsection (4) above “*the transferred surplus*”is VE – RBTO where—
- (a) VE has the same meaning as in section 444ABB, and
- (b) RBTO means so much of BTO as relates to relevant non-transferred assets transferred to the transferee where—
- (i) BTO has the same meaning as in section 444ABA, and
- (ii) “*relevant non-transferred assets*” has the same meaning as in section 444AB.
- (5A) Where the transfer is to more than one transferee, the amount of any reduction to be made in accordance with subsection (4) above is to be apportioned to each transferee on a just and reasonable basis.
- (6) See section 444AA for the meaning of “the transfer date”, and section 444AB for the meaning of “the relevant period of account”, in this section.
##### 444ACZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444ACA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444AD
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444AE
- (1) Where an insurance business transfer scheme has effect to transfer the relevant financing arrangements entered into in relation to a non-profit fund of an insurance company (“*the transferor*”) to another person (“*the transferee*”), after the transfer—
- (a) they are to be treated for the purposes of sections 83YC and 83YD of the Finance Act 1989 as having been entered into by the transferee, but
- (b) the references in those sections to earlier periods of account of the transferee include earlier periods of account of the transferor.
- (2) But if the insurance business transfer scheme has effect—
- (a) to transfer some but not all of the relevant financing arrangements entered into in relation to the non-profit fund of the transferor, or
- (b) to transfer all of those relevant financing arrangements but not all to one person,
any calculation required by virtue of section 83YC or 83YD in relation to a period of account of the transferor, or of the transferee or any of the transferees, ending after the transfer is to be made on a just and reasonable basis.
- (3) Subsection (4) below applies where—
- (a) relevant financing arrangements have been entered into in relation to a non-profit fund of an insurance company (“the old company”), and
- (b) as a result of any transaction other than an insurance business transfer scheme, another insurance company (“the new company”) becomes the debtor in respect of the money debt, or the cedant, under the financial reinsurance arrangements.
- (4) Where this subsection applies, after the transaction—
- (a) the relevant financing arrangements are to be treated for the purposes of sections 83YC and 83YD as having been entered into by the new company, but
- (b) the references in those sections to earlier periods of account of the new company include earlier periods of account of the old company, and
- (c) the transaction is not to be regarded as causing the condition in section 83YD(3) to be met in relation to the old company.
- (5) But if the transaction has effect—
- (a) to transfer some but not all of the relevant financing arrangements entered into in relation to the non-profit fund of the old company, or
- (b) to transfer all of those relevant financing arrangements but not all to one person,
any calculation required by virtue of section 83YC or 83YD in relation to a period of account of the old company, or of the new company or any of the new companies, ending after the transaction is to be made on a just and reasonable basis.
- (6) Expressions used in this section and section 83YC or 83YD have the same meanings here as there.
##### 444AEA
- (1) This section applies where—
- (a) as a result of the whole . . . of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a life assurance trade profits advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of the whole . . . of the transfer scheme arrangements is the obtaining of that . . . advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” means an insurance business transfer scheme (“*the relevant transfer scheme*”) together with any relevant associated operations.
- (3) If a life assurance trade profits advantage is obtained by the transferor (see subsection (1) of section 444AEB), the amount of the . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor—
- (a) to the extent that the advantage is obtained by the transferor in the period of account covering the transfer date or any earlier period of account—
- (i) for the period of account of the transferor ending (or treated as ending) immediately before the transfer date, or
- (ii) where there is no such period, for the period of account of the transferor including the transfer date, and
- (b) to the extent that the advantage is obtained by the transferor in any later period of account of the transferor in which any relevant associated operations are effected, for that later period of account.
- (4) If a life assurance trade profits advantage is obtained by the transferee (see subsection (1) of section 444AEC), the amount of the . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the period of account of the transferee in which the advantage is obtained by the transferee.
- (5) In this section and sections 444AEB to 444AECC“*relevant associated operations*”, in relation to the relevant transfer scheme, means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance,
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee, or
- (d) any surplus-increasing transfer of assets,
which is effected in connection with the relevant transfer scheme.
- (6) In subsection (5) above—
- “*dependant*” and “*insurance undertaking*” have the same meaning as in the Insurance Prudential Sourcebook, and
- “*surplus-increasing transfer of assets*” means a transfer of assets of the transferor's long-term insurance fund to the transferee which is not brought into account for any period of account of the transferee but increases the amount of total surplus shown in line 39 of Form 58 in any periodical return of the transferee.
- (7) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AEB
- (1) A life assurance trade profits advantage is obtained by the transferor if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (2) If a life assurance trade profits advantage is obtained by the transferor, the amount of the advantage is the aggregate of—
- (a) the amounts (if any) by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, and
- (b) the amounts (if any) by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (3) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (4) In this section and sections 444AEC, 444AECB and 444AECC—
- “*section 35 profits*” and “*section 35 losses*” means profits and losses computed in accordance with the life assurance trade profits provisions, and
- “the relevant time” is the time at which any application under section 444AED is made, or, if no such application is made, the transfer date.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AEC
- (1) A life assurance trade profits advantage is obtained by the transferee if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (2) If a life assurance trade profits advantage is obtained by the transferee, the amount of the advantage is—
- (a) the amount by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, or
- (b) the amount by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (3) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (4) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “ section 35 profits” and “ section 35 losses” and “the relevant time”, in this section.
##### 444AECA
- (1) This section applies where—
- (a) as a result of any part of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a life assurance trade profits advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of that part of the transfer scheme arrangements is the obtaining of that . . . advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” has the same meaning as in section 444AEA.
- (3) If a life assurance trade profits advantage is obtained by the transferor (see subsection (1) of section 444AECB), the amount of the . . . advantage (see subsection (3) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor—
- (a) to the extent that the advantage is obtained by the transferor in the period of account covering the transfer date or any earlier period of account—
- (i) for the period of account of the transferor ending (or treated as ending) immediately before the transfer date, or
- (ii) where there is no such period, for the period of account of the transferor including the transfer date, and
- (b) to the extent that the advantage is obtained by the transferor in any later period of account of the transferor in which any relevant associated operations are effected, for that later period of account.
- (4) If a life assurance trade profits advantage is obtained by the transferee (see subsection (1) of section 444AECC), the amount of the . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the period of account of the transferee in which the advantage is obtained by the transferee.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AECB
- (1) A life assurance trade profits advantage is obtained by the transferor if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the section 35 profits to be greater or the section 35 losses to be less than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a life assurance trade profits advantage is obtained by the transferor.
- (3) If a life assurance trade profits advantage is obtained by the transferor, the amount of the advantage is the aggregate of—
- (a) the amounts (if any) by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, and
- (b) the amounts (if any) by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (5) In this section and section 444AECC “*the relevant part of the arrangements*” means, in relation to a life assurance trade profits advantage, the part of the transfer scheme arrangements as a result of which the advantage is obtained.
- (6) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “ section 35 profits” and “ section 35 losses” and “the relevant time”, in this section.
##### 444AECC
- (1) A life assurance trade profits advantage is obtained by the transferee if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the section 35 profits to be greater, or the section 35 losses to be less, than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a life assurance trade profits advantage is obtained by the transferor.
- (3) If a life assurance trade profits advantage is obtained by the transferee, the amount of the advantage is—
- (a) the amount by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, or
- (b) the amount by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (5) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations”, section 444AEB for the meaning of “ section 35 profits” and “ section 35 losses” and “the relevant time” and section 444AECB for the meaning of “the relevant part of the arrangements”, in this section.
##### 444AED
- (1) Sections 444AEA and 444AECA do not apply in relation to the transferor or the transferee if, on an application under this section, the Commissioners for Her Majesty's Revenue and Customs (“the HMRC Commissioners”) have given a notice under subsection (2) below.
- (2) A notice under this subsection is a notice stating that the HMRC Commissioners are satisfied—
- (a) that the obtaining of a life assurance trade profits advantage by the applicant is not the sole or main purpose of the whole or any part of the transfer scheme arrangements, or
- (b) that the transferor and the transferee are members of the same group of companies and that there is no advantage to the group arising from any life assurance trade profits advantage obtained by the transferor or by the transferee.
- (3) For the purposes of this section there is no advantage to a group arising from any life assurance trade profits advantage obtained by the transferor or by the transferee if—
- (a) as a result of transfer scheme arrangements, there is an increase in the liability to corporation tax of one or more companies which are members of the group of companies, and
- (b) the amount (or aggregate amount) of that increase is not less than the reduction in the liability to corporation tax of the transferor or the transferee (or both) arising from the obtaining of the life assurance trade profits advantage.
- (4) An application under this section must be in writing and contain particulars of the transfer scheme arrangements.
- (5) The HMRC Commissioners may by notice require the applicant to provide further particulars in order to enable them to determine the application.
- (6) A requirement may be imposed under subsection (5) above within 30 days of the receipt of the application or of any further particulars required under that subsection.
- (7) If a notice under subsection (5) above is not complied with within 30 days or such longer period as the HMRC Commissioners may allow, they need not proceed further on the application.
- (8) The HMRC Commissioners must give notice of their decision on an application under this section to the applicant within 30 days of receiving the application or, if they give a notice under subsection (5) above, within 30 days of that notice being complied with.
- (9) If the HMRC Commissioners—
- (a) give notice to the applicant under subsection (8) above that they are not satisfied as mentioned in subsection (2) above, or
- (b) do not comply with subsection (8) above,
the applicant may require them to transmit the application to the tribunal.
- (10) A requirement under subsection (9) above must be imposed within 30 days of the giving of the notice or the failure to comply and must be accompanied by any notice given under subsection (5) above and further particulars provided pursuant to any such notice.
- (11) Any notice given by the tribunal has effect for the purposes of subsection (1) above as if it were given by the HMRC Commissioners.
- (12) If any particulars provided under this section do not fully and accurately disclose all facts and considerations material for the decision of the HMRC Commissioners or the tribunal, any resulting notice that they are satisfied as mentioned in subsection (2) above is void.
- (13) For the purposes of this section two companies are members of the same group of companies if they are for the purposes of Part 5 of CTA 2010.
### Surpluses of mutual and former mutual businesses
##### 444AF
- (1) This section applies in relation to a period of account of an insurance company (“*the relevant period*”) if—
- (a) at any time in the relevant period the company carries on life assurance business that is not mutual business,
- (b) the company has an amount of undistributed demutualisation surplus for the relevant period (see subsection (7)), and
- (c) there is a reduction in the amount of the company's unappropriated surplus over the relevant period (see section 444AI).
- (2) Where this section applies in relation to the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund whichever of the following amounts is the smallest—
- (a) the amount of the reduction mentioned in subsection (1)(c) above;
- (b) the amount of the company's undistributed demutualisation surplus for the relevant period;
- (c) the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (4) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which section 432C applies,
that subsection shall have effect as if for “smallest” there were substituted smaller and as if paragraph (c) were omitted.
- (5) This section shall have effect—
- (a) for the purposes of computing in accordance with the life assurance trade profits provisions the profits of the company's life assurance business, and
- (b) for the purposes of so computing profits of the company chargeable . . . under section 436A (gross roll-up business).
- (6) But for the purposes mentioned in subsection (5)(b) above, this section and section 444AG have effect subject to the modification in section 444AH; and the Corporation Tax Acts have effect accordingly (so that there may, in particular, be a difference between—
- (a) the amount deemed to be brought into account by virtue of subsection (2) above for a period of account for those purposes, and
- (b) the amount so deemed to be brought into account for that period of account for the purposes mentioned in subsection (5)(a) above).
- (7) For the purposes of this section, the undistributed demutualisation surplus of an insurance company for the relevant period is—
- (a) an amount equal to (UDSP – AD + DTSI – DTSO); or
- (b) if that amount is a negative amount, nil.
For this purpose—
- UDSP is the undistributed demutualisation surplus of the company for the period of account immediately preceding the relevant period,
- AD is any amount deemed under this section to be brought into account for the period of account immediately preceding the relevant period as an increase in the value of the assets of the company's long-term insurance fund,
- DTSI is the total amount of any demutualisation transfer surpluses accruing to the company during the relevant period (see section 444AG),
- DTSO is the total amount of any demutualisation transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
##### 444AG
- (1) For the purposes of section 444AF and this section, a demutualisation transfer surplus accrues to an insurance company where—
- (a) life assurance business is transferred to the company by a person (“*the transferor*”),
- (b) after the transfer, the company carries on the transferred business otherwise than as mutual business, and
- (c) the condition in subsection (2) below is satisfied in relation to the transfer.
- (2) The condition is that—
- (a) immediately before the transfer, the transferor carried on the transferred business as mutual business, or
- (b) where paragraph (a) above does not apply, some or all of the transferred business was carried on by an insurance company as mutual business at a time on or after 1st January 1990 and before the transfer (“former mutual business”).
- (3) The demutualisation transfer surplus accrues to the company on the date of the transfer.
- (4) The amount of the demutualisation transfer surplus is given by subsection (5) or (6) below.
- (5) Where subsection (2)(a) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer, the aggregate of—
- (i) the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer, and
- (ii) the amount of any added surplus accruing to the company in connection with the transfer (see subsection (10));
- (b) otherwise, a just and reasonable portion of that aggregate amount, having regard to how much of the transferor's life assurance business was transferred to the company under the transfer.
- (6) Where subsection (2)(b) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer and all of the transferred business is former mutual business, the former mutual surplus of the transferor on the transfer date (see subsection (7));
- (b) otherwise, so much of that former mutual surplus as it is just and reasonable to attribute to the company, having regard in particular to—
- (i) how much of the transferor's life assurance business was transferred to the company under the transfer, and
- (ii) how much of the transferred business is former mutual business.
- (7) For the purposes of subsection (6) above, the former mutual surplus of the transferor on the transfer date is—
- (a) the amount given by subsection (8) below, or
- (b) if less, the amount given by subsection (9) below.
- (8) The amount given by this subsection is the total amount of any demutualisation transfer surpluses accruing to the transferor—
- (a) on or after 1st January 1990, and
- (b) on or before the date of the transfer.
- (9) The amount given by this subsection is the lowest amount of unappropriated surplus of the transferor at the end of any period of account ending—
- (a) on or after the date of the last occasion on which a demutualisation transfer surplus accrued to it as mentioned in subsection (8) above, and
- (b) on or before the date of the transfer.
- (10) For the purposes of this section, added surplus accrues to the company in connection with the transfer if—
- (a) an amount of assets is received by the company in connection with the transfer, no later than six months after the date of the transfer,
- (b) the amount is not brought into account by the company,
- (c) the amount is added to the unappropriated surplus of the company, and
- (d) the amount does not derive from any unappropriated surplus of the transferor;
and the amount of the added surplus is the amount referred to in paragraphs (a) to (d) above.
##### 444AH
- (1) The modification in this section has effect for the purposes mentioned in section 444AF(5)(b) only.
- (2) In relation to any demutualisation transfer surplus accruing to a company in a post-2002 period of account—
- (a) the references in section 444AG(5) to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer shall be taken to be references to—
- (i) the amount of that unappropriated surplus, or
- (ii) if less, the unappropriated surplus of the transferor at the end of the period of account immediately preceding the first post-2002 period of account of the transferor; and
- (b) the references in sections 444AF and 444AG to the amount of any demutualisation transfer surplus are to have effect accordingly.
- (3) In this section “*post-2002 period of account*”, in relation to an insurance company, means a period of account of the company beginning on or after 1st January 2003 and ending on or after 9th April 2003.
##### 444AI
- (1) For the purposes of section 444AF—
- (a) there is a reduction in the amount of the company's unappropriated surplus over the relevant period if CUS is less than (OUS + TSI – TSO);
- (b) the amount of that reduction is the amount by which CUS is less than (OUS + TSI – TSO).
- (2) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- TSI is the total amount of any transfer surpluses accruing to the company during the relevant period (see subsections (3) to (7)),
- TSO is the total amount of any transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
- (3) For the purposes of this section, a transfer surplus accrues to an insurance company where life assurance business is transferred to the company by a person (“*the transferor*”).
- (4) The transfer surplus accrues to the company on the date of the transfer.
- (5) The amount of the transfer surplus is equal to so much of the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer as is transferred to the company under the transfer.
- (6) But if, immediately before the transfer, the transferor carried on the transferred business as mutual business, the amount of the transfer surplus is the aggregate of—
- (a) the amount given by subsection (5) above, and
- (b) the amount of any added surplus accruing to the company in connection with the transfer.
- (7) Subsection (10) of section 444AG applies for the purposes of subsection (6) above as it applies for the purposes of that section.
##### 444AJ
- (1) For the purposes of sections 444AF and 444AK, the amount of the company's relevant receipts reduction for the relevant period is to be calculated by—
- (a) determining, in the case of each with-profits fund of the company, the amount given by subsection (2) or (6) below for the relevant period, and
- (b) aggregating each of those amounts.
- (2) The amount, in the case of a fund other than a policy holder participation fund, is—
- (a) where the gross transfer to non-technical account for the fund for the relevant period (see subsections (3) and (4)) is greater than the post-policy holder surplus for the fund for the relevant period (see subsection (5)), the amount of the difference;
- (b) otherwise, nil.
- (3) In this section “*the gross transfer to non-technical account*” means the amount shown in line 13 of Form 58 for the fund.
- (4) But if—
- (a) there is a transfer from a with-profits fund of the company to another fund of the company (“the initial transfer”) which is shown in (or included in an amount shown in) line 14 of Form 58 for the with-profits fund,
- (b) there is a transfer from a fund of the company (whether or not the other fund mentioned in paragraph (a) above) to the non-technical account which is shown in (or included in an amount shown in) line 13 of Form 58 for that fund, and
- (c) the transfer to the non-technical account can reasonably be regarded as connected with the initial transfer,
the amount of the gross transfer to non-technical account for the relevant period given by subsection (3) above in the case of the with-profits fund is to be increased by the amount transferred to the non-technical account.
- (5) In this section “*post-policy holder surplus*” means an amount equal to—
$$SA-TAP$where—SA is—(a) the amount shown in line 34 of Form 58 for the fund (surplus arising since last valuation), or(b) if that amount is a negative amount, nil;TAP is the amount shown in line 46 of Form 58 for the fund (total allocated to policy holders).$
- (6) The amount, in the case of a policy holder participation fund, is—
- (a) where TAP is greater than SA, the amount of the difference;
- (b) otherwise, nil;
and for this purpose “*SA*” and “*TAP*” have the same meaning as in subsection (5) above.
- (7) References in this section to Form 58 are references to that Form in the periodical return of the company for the relevant period.
- (8) In this section “*policy holder participation fund*” means a fund in the case of which an amount equal to the amount shown in line 34 of Form 58 for the fund is allocated to policy holders for the relevant period.
##### 444AK
- (1) This section applies if at any time in a period of account of an insurance company (“*the relevant period*”)—
- (a) the company carries on life assurance business as mutual business, and
- (b) the company carries on gross roll-up business.
- (2) If there is a reduction in the amount of the company's unappropriated surplus over the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund—
- (a) the amount of that reduction, or
- (b) if less, the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) But subsection (2) above shall have effect only for the purposes of computing in accordance with the life assurance trade profits provisions the profits for the relevant period of the company's gross roll-up business.
- (4) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (5) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which section 432C applies,
that subsection shall have effect as if paragraph (b) and the word “or” before it were omitted.
- (6) For the purposes of this section, there is a reduction in the amount of the company's unappropriated surplus over the relevant period if—
- (a) CUS is less than OUS, and
- (b) CUS is less than UUS.
- (7) The amount of that reduction is—
- (a) the amount by which CUS is less than OUS, or
- (b) if OUS is greater than UUS, the amount by which CUS is less than UUS.
- (8) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- UUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the first period of account of the company to begin on or after 1st January 2003 and to end on or after 9th April 2003.
##### 444AL
- (1) This section applies for the purposes of sections 444AF to 444AK.
- (2) References to mutual business, in relation to any time, include business which at that time is treated for the purposes of section 432E as mutual business.
- (3) “*Unappropriated surplus*”, in relation to a period of account of an insurance company, means an unappropriated surplus on valuation as shown in the periodical return of the company for the period of account.
- (4) References to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer are, where a period of account of the transferor does not end at that time, references to the unappropriated surplus on valuation that would have been shown in a periodical return of the transferor for that period had such a return been drawn up.
### Provisions applying in relation to overseas life insurance companies
##### 444B
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#### Reduction in chargeable profits following an exempt period
##### 444C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Equalisation reserves
##### 444BA
- (1) Subject to the following provisions of this section and to sections 444BB to 444BD, the rules in subsection (2) below shall apply in making any computation, for the purposes of section 35 of CTA 2009 (charge on trade profits), of the profits or losses for any accounting period of an insurance company whose business has at any time been or included business in respect of which it was required, by virtue of equalisation reserve rules, to maintain an equalisation reserve.
- (2) Those rules are—
- (a) that amounts which, in accordance with equalisation reserve rules, are transferred into the equalisation reserve in respect of the company’s business for the accounting period in question are to be deductible;
- (b) that amounts which, in accordance with any such regulations, are transferred out of the reserve in respect of the company’s business for that period are to be treated as receipts of that business; and
- (c) that it must be assumed that all such transfers as are required by equalisation reserve rules to be made into or out of the reserve in respect of the company’s business for any period are made as required.
- (3) Where an insurance company having any business in respect of which it is required, by virtue of equalisation reserve rules, to maintain an equalisation reserve ceases to trade—
- (a) any balance which exists in the reserve at that time for the purposes of the Tax Acts shall be deemed to have been transferred out of the reserve immediately before the company ceases to trade; and
- (b) that transfer out shall be deemed to be a transfer in respect of the company’s business for the accounting period in which the company so ceases and to have been required by equalisation reserve rules.
- (4) Where—
- (a) an amount is transferred into an equalisation reserve in respect of the business of an insurance company for any accounting period,
- (b) the rule in subsection (2)(a) above would apply to the transfer of that amount but for this subsection,
- (c) that company by notice in writing to an officer of the Board makes an election in relation to that amount for the purposes of this subsection, and
- (d) the notice of the election is given not more than two years after the end of that period,
the rule mentioned in subsection (2)(a) above shall not apply to that transfer of that amount and, instead, the amount transferred (the “unrelieved transfer”) shall be carried forward for the purposes of subsection (5) below to the next accounting period and (subject to subsection (6) below) from accounting period to accounting period.
- (5) Where—
- (a) in accordance with equalisation reserve rules, a transfer is made out of an equalisation reserve in respect of an insurance company’s business for any accounting period,
- (b) the rule in subsection (2)(b) above would apply to the transfer but for this subsection, and
- (c) the accounting period is one to which any amount representing one or more unrelieved transfers has been carried forward under subsection (4) above,
that rule mentioned in subsection (2)(b) above shall not apply to that transfer except to the extent (if any) that the amount of the transfer exceeds the aggregate of the amounts representing unrelieved transfers carried forward to that period.
- (6) Where in the case of any company—
- (a) any amount representing one or more unrelieved transfers is carried forward to an accounting period in accordance with subsection (4) above, and
- (b) by virtue of subsection (5) above the rule in subsection (2)(b) above does not apply to an amount representing the whole or any part of any transfer out of an equalisation reserve in respect of the company’s business for that period,
the amount mentioned in paragraph (a) above shall not be carried forward under subsection (4) above to the next accounting period except to the extent (if any) that it exceeds the amount mentioned in paragraph (b) above.
- (7) To the extent that any actual or assumed transfer in accordance with equalisation reserve rules of any amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes—
- (a) the rule in subsection (2)(a) above shall not apply to that transfer; and
- (b) the making of that transfer shall be disregarded in determining, for the purposes of the Tax Acts, whether and to what extent there is subsequently any requirement to make a transfer into or out of the reserve in accordance with equalisation reserve rules;
and this subsection applies irrespective of whether the insurance company in question is a party to the arrangements.
- (8) For the purposes of this section the transfer of an amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes to the extent that the arrangements to which it is attributable are arrangements—
- (a) the sole or main purpose of which is, or
- (b) the sole or main benefit accruing from which might (but for subsection (7) above) be expected to be,
the reduction by virtue of this section of any liability to tax.
- (9) Where—
- (a) any transfer made into or out of an equalisation reserve maintained by an insurance company is made in accordance with equalisation reserve rules in respect of business carried on by that company over a period (“the equalisation period”), and
- (b) parts of the equalisation period are in different accounting periods,
the amount transferred shall be apportioned for the purposes of this section between the different accounting periods in the proportions that correspond to the number of days in the equalisation period that are included in each of those accounting periods.
- (10) The Treasury may by regulations provide in relation to any accounting periods ending on or after 1st April 1996 for specified transitional provisions contained in equalisation reserve rules to be disregarded for the purposes of the Tax Acts in determining how much is required, on any occasion, to be transferred into or out of any equalisation reserve in accordance with the rules.
- (11) In this section, and in sections 444BB to 444BD, “equalisation reserves rules” means the rules in chapter 1.4 of the Insurance Prudential Sourcebook.
##### 444BB
- (1) The Treasury may by regulations make provision modifying section 444BA so as, in cases mentioned in subsection (2) below—
- (a) to require—
- (i) sums by reference to which the amount of any transfer into or out of an equalisation reserve falls to be computed, or
- (ii) the amount of any such transfer,
to be apportioned between different parts of the business carried on for any period by an insurance company; and
- (b) to provide for the purposes of corporation tax for the amounts taken to be transferred into or out of an equalisation reserve to be computed disregarding any such sum or, as the case may be, any such part of a transfer as is attributed, in accordance with the regulations, to a part of the business described for the purpose in the regulations.
- (2) Those cases are cases where an insurance company which, in accordance with equalisation reserve rules, is required to make transfers into or out of an equalisation reserve in respect of any business carried on by that company for any period is carrying on, for the whole or any part of that period—
- (a) any business the income and gains of which fall to be disregarded in making a computation of the company’s profits in accordance with the rules applicable for the purposes of section 35 of CTA 2009 (charge on trade profits), or
- (b) any business by reference to which double taxation relief is afforded in respect of any income or gains.
- (3) Section 444BA shall have effect (subject to any regulations under subsection (1) above) in the case of an equalisation reserve maintained by an insurance company which—
- (a) is not resident in the United Kingdom, and
- (b) carries on business in the United Kingdom through a permanent establishment,
only if such conditions as may be prescribed by regulations made by the Treasury are satisfied in relation to that company and in relation to transfers into or out of that reserve.
- (4) Regulations under this section prescribing conditions subject to which section 444BA is to apply in the case of any equalisation reserve maintained by an insurance company may—
- (a) contain conditions imposing requirements on the company to furnish the Board with information with respect to any matters to which the regulations relate, or to produce to the Board documents or records relating to any such matters; and
- (b) provide that, where any prescribed condition is not, or ceases to be, satisfied in relation to the company or in relation to transfers into or out of that reserve, there is to be deemed for the purposes of the Tax Acts to have been a transfer out of that reserve of an amount determined under the regulations.
- (5) Regulations under this section may—
- (a) provide for apportionments under the regulations to be made in such manner, and by reference to such factors, as may be specified or described in the regulations;
- (b) make different provision for different cases;
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit;
- (d) make provision having retrospective effect in relation to accounting periods beginning not more than one year before the time when the regulations are made;
and the powers conferred by this section in relation to transfers into or out of any reserve shall be exercisable in relation to both actual and assumed transfers.
- (6) In this section “*double taxation relief*” means—
- (a) relief under double taxation arrangements which takes the form of a credit allowed against corporation tax, or
- (b) relief under section 18(1)(b) and (2) of TIOPA 2010 which takes that form;
and “*double taxation arrangements*” here means arrangements which have effect under section 2(1) of that Act (double taxation relief by agreement with territories outside the United Kingdom).
##### 444BC
- (1) The Treasury may by regulations make provision modifying the operation of section 444BA in relation to cases where an insurance company has, for the purpose of preparing the documents it is required to prepare for the purposes of section 9.3 of the Prudential Sourcebook (Insurers), applied for any period an accounting method described in paragraphs 57 to 59 in Section E of Part 2 of Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (accounting on a non-annual basis).
- (2) Subsection (5) of section 444BB applies for the purposes of this section as it applies for the purposes of that section.
##### 444BD
- (1) The Treasury may by regulations provide for section 444BA to have effect, in such cases and subject to such modifications as may be specified in the regulations, in relation to any equivalent reserves as it has effect in relation to equalisation reserves maintained by virtue of equalisation reserve rules.
- (2) For the purposes of this section a reserve is an equivalent reserve if—
- (a) it is maintained, otherwise than by virtue of equalisation reserve rules, either—
- (i) by an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (ii) by a firm which has permission under paragraph 4 of Schedule 4 to that Act (as a result of qualifying for authorisation under paragraph 2 of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (iii) in respect of any business which consists of the effecting or carrying out of contracts of insurance and which is carried on outside the United Kingdom by a company resident in the United Kingdom;
- (b) the purpose for which, or the manner in which, it is maintained is such as to make it equivalent to an equalisation reserve maintained by virtue of equalisation reserve rules.
- (3) For the purposes of this section a reserve is also an equivalent reserve if it is maintained in respect of any credit insurance business in accordance with requirements imposed either—
- (a) by or under any enactment, or
- (b) under so much of the law of any territory as secures compliance with the requirements of Article 1 of the credit insurance directive (equalisation reserves for credit insurance).
- (4) Without prejudice to the generality of subsection (1) above, the modifications made by virtue of that subsection may—
- (a) provide for section 444BA to apply in the case of an equivalent reserve only where such conditions as may be specified in the regulations are satisfied in relation to the company maintaining the reserve or in relation to transfers made into or out of it; and
- (b) contain any other provision corresponding to any provision which, in the case of a reserve maintained by virtue of equalisation reserve rules, may be made under sections 444BA to 444BC.
- (5) Subsections (4) and (5) of section 444BB shall apply for the purposes of this section as they apply for the purposes of that section.
- (6) Without prejudice to the generality of section 444BB(5), the transitional provision which by virtue of subsection (5) above may be contained in regulations under this section shall include—
- (a) provision for treating the amount of any transfers made into or out of an equivalent reserve in respect of business carried on for any specified period as increased by the amount by which they would have been increased if no transfers into the reserve had been made in respect of business carried on for an earlier period; and
- (b) provision for excluding from the rule in section 444BA(2)(b) so much of any amount transferred out of an equivalent reserve as represents, in pursuance of an apportionment made under the regulations, the transfer out of that reserve of amounts in respect of which there has been no entitlement to relief by virtue of section 444BA(2)(a).
- (7) In this section—
- “credit insurance business” means business which consists of the effecting or carrying out of contracts of insurance against risks of loss to the persons insured arising from—the insolvency of debtors of theirs, orfrom the failure (otherwise than through insolvency) of debtors of theirs to pay their debts when due;
- “*the credit insurance directive*” means Council Directive [87/343/EEC](https://www.legislation.gov.uk/european/directive/1987/0343) of 22nd June 1987 amending, as regards credit insurance and suretyship insurance, First Directive 73/239 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance; . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 458A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 461A
- (1) For the purposes of sections 461B and 461C, a “*qualifying society*” is an incorporated friendly society which—
- (a) immediately before its incorporation, was a registered friendly society to which section 461(2) did not apply,
- (b) was formed otherwise than by the incorporation of a registered friendly society or the amalgamation of two or more friendly societies and satisfies subsection (2) below, or
- (c) was formed by the amalgamation of two or more friendly societies and satisfies subsection (3) below,
and in respect of which no direction under section 461C(5) is in force.
- (2) A society satisfies this subsection if its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board.
- (3) If at the time of the amalgamation referred to in subsection (1)(c) above—
- (a) section 461(2) applied to none of the registered friendly societies being amalgamated (if any), and
- (b) all of the incorporated friendly societies being amalgamated (if any) were qualifying societies,
the society formed by the amalgamation satisfies this subsection.
- (4) For the purposes of this section and section 461C, any group of persons which was approved for the purposes of this section (as mentioned in subsection (2) above) by the Friendly Societies Commission immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date.
##### 461B
- (1) Subject to the following provisions of this section, a qualifying society shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) Subsection (1) above shall not apply to any profits arising or accruing to the society from, or by reason of its interest in, a body corporate which is a subsidiary (within the meaning of the Friendly Societies Act 1992) of the society or of which the society has joint control (within the meaning of that Act).
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) If an incorporated friendly society which is not a qualifying society makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (4) In relation to an incorporated friendly society which, immediately before its incorporation, was a registered friendly society to which section 461(2) applied—
- (a) the references in subsection (3) above to sums paid to the society shall include sums paid to the registered friendly society,
- (b) the reference in subsection (3)(a) above to any payment made by the society shall include any payment made by the registered friendly society after 26 March 1974 or such later date as was specified in any direction under section 461 (7) relating to it, and
- (c) the reference in subsection (3)(b) above to any repayment shall include any repayment made by the registered friendly society.
- (5) Where a qualifying society at any time ceases by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, the company into which the society is converted shall be exempt from . . . corporation tax on its profits arising from any part of its business, other than life or endowment business, which relates to contracts made before that time.
- (6) But if during an accounting period of the company there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on any such part of its business, the company shall not be exempt from corporation tax by virtue of subsection (5) above for that or any subsequent accounting period.
- (6A) Where—
- (a) at any time an insurance company acquires by way of transfer of engagements from a qualifying society any business other than life or endowment business, and
- (b) immediately before that time the society was exempt from corporation tax on profits arising from that business,
the insurance company shall be exempt from corporation tax on its profits arising from any part of that business which relates to contracts made before that time.
- (6B) But if during an accounting period of the insurance company there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on any such part of that business, the company shall not be exempt from corporation tax by virtue of subsection (6A) above for that or any subsequent accounting period.
- (7) Any part of a company’s business to which an exemption under subsection (5) or (6A) above relates shall be treated for the purposes of the Corporation Tax Acts as a separate business from any other business carried on by the company.
- (8) 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 (5) or (6A) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (9) Regulations under subsection (8) 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.
##### 461C
- (1) Subject to subsection (2) below, subsections (3) and (4) below apply where a qualifying society—
- (a) begins to carry on business other than life or endowment business, or
- (b) in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character.
- (2) Subsections (3) and (4) below do not apply if—
- (a) the society’s business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of section 461 or 461A by the Board, or
- (b) the society’s rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as is authorised for the purposes of section 461.
- (3) If it appears to the Board, having regard to the restrictions imposed by section 461 on registered friendly societies registered after 31st May 1973, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the society to which it is given shall cease to be a qualifying society as from the date of the direction.
- (5) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction . . . on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (1) above;
- (b) subsections (3) and (4) above do not apply to it by reason of subsection (2) above; or
- (c) the direction is not necessary for the protection of the revenue.
##### 461D
- (1) Where—
- (a) a man is entitled to relief under section 257A, but
- (b) the amount which he is entitled to deduct from his total income by virtue of that section exceeds what is left of his total income after all other deductions have been made from it,
his wife shall be entitled to a deduction from her total income of an amount equal to the excess.
- (2) In determining for the purposes of subsection (1)(b) above the amount that is left of a person’s total income for a year of assessment after other deductions have been made from it, there shall be disregarded any deduction made—
- (a) on account of any payments of relevant loan interest which become due in that year and to which section 369 applies, or
- (b) under section 289 or
- (c) on account of any payments to which section 593(2) or 639(3) applies,or
- (d) on account of any payments to which section 54(5) of the Finance Act 1989 applies.
, or
- (e) on account of any payments to which section 32(4) of the Finance Act 1991 applies.
- (3) This section shall not apply for a year of assessment unless the claimant’s husband has given to the inspector written notice that it is to apply; and any such notice—
- (a) shall be given not later than six years after the end of the year of assessment to which it relates,
- (b) shall be in such form as the Board may determine, and
- (c) shall be irrevocable.
##### 257C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 257F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 261A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 266A
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was exempt from corporation tax on profits arising from that business,
the transferee is so exempt after that time.
- (2) But if during an accounting period of the transferee there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on that business, the transferee shall not be exempt from corporation tax by virtue of subsection (1) above for that or any subsequent accounting period.
- (3) Where—
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was not exempt from corporation tax on profits arising from that business,
the transferee is not so exempt after that time.
- (4) The Treasury may by regulations provide that, where any business of a friendly society is exempt from corporation tax by virtue of subsection (1) above, or not so exempt by virtue of subsection (3) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (5) Regulations under subsection (4) 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.
##### 462A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Returns where it is not established whether acceptable distribution policy applies.
##### 465A
- (1) This section applies where any assets of a branch of a registered friendly society have been identified in a scheme under section 6(5) of the Friendly Societies Act 1992 (property, rights etc. excluded from transfer to the society on its incorporation).
- (2) In relation to any time after the incorporation of the society, the assets shall be treated for the purposes of the Tax Acts as assets of the society (and, accordingly, any tax liability arising in respect of them shall be a liability of the society rather than of the branch).
- (3) Where, by virtue of this section, tax in respect of any of the assets becomes chargeable on and is paid by the society, the society may recover from the trustees in whom those assets are vested the amount of the tax paid.
##### 468AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### General definition of offshore fund
##### 468C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company with investment business: deductions generally
##### 468EE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Distributions of authorised unit trusts: general
##### 468H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Dividend and foreign income distributions
##### 468J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Interest distributions
##### 468L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charitable and non-charitable expenditure
##### 468M
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468N
- (1) Subsection (2) below applies where—
- (a) an interest distribution is made for a distribution period to a unit holder; and
- (b) the gross income entered in the distribution accounts for the purposes of computing the total amount available for distribution to unit holders does not derive from eligible income entirely.
- (2) Where this subsection applies, the obligation to deduct under section 349(2) shall not apply to the relevant amount of the interest distribution to the unit holder if the residence condition is on the distribution date fulfilled with respect to him.
- (3) Section 468O makes provision with respect to the circumstances in which the residence condition is fulfilled with respect to a unit holder.
- (4) This is how to calculate the relevant amount of the interest distribution—
$$R=AxBC$Where—R = the relevant amount;A = the amount of the interest distribution before deduction of tax to the unit holder in question;B = such amount of the gross income as derives from eligible income;C = the amount of the gross income.$
- (5) In subsection (4) above the references to the gross income are references to the gross income entered as mentioned in subsection (1)(b) above.
##### 468O
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468P
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468PA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468PB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Distributions to corporate unit holder
##### 468Q
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468R
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 469A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 472A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 477A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 477B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 480A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 480B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionment of chargeable profits and creditable tax
##### 480C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### General definition of offshore fund
##### 482A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### PETROLEUM EXTRACTION ACTIVITIES
##### 494AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 494A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 496A
Schedule 19B to this Act (exploration expenditure supplement) shall have effect.
##### 496B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company with investment business: deductions generally
##### 501A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 501B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Chapter 5A — Special rules for long funding leases of plant or machinery: corporation tax
### Introductory
##### 502A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessors under long funding finance leases
##### 502B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessors under long funding operating leases
##### 502E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessors under long funding finance or operating leases: avoidance etc
#### Tariff receipts and tax-exempt tariffing receipts
##### 502GA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502GB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502GC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502GD
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Insurance company as lessor
##### 502H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessees under long funding finance leases
#### Introductory.
##### 502I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessees under long funding operating leases
##### 502K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Interpretation of Chapter
##### 502L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 504A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure.
#### Old societies.
##### 506A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 506B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 506C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief by agreement with other territories.
##### 508A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 508B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 510A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 519A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of credit code.
#### Information: supplementary provisions
#### Recovery of tax credits incorrectly paid.
#### Relief by agreement with other territories.
#### Recovery of tax credits incorrectly paid.
### Designs
##### 537A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 537B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The qualifying subsidiaries requirement
##### 539ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 539A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for individuals.
##### 546A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 546B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 546C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 546D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 547A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 548A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Arrangements to avoid section 812.
##### 548B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 551A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 552ZA
- (1) This section supplements section 552 and shall be construed as one with it.
- (2) Where the obligations under any policy or contract of the body that issued, entered into or effected it (“*the original insurer*”) are at any time the obligations of another body (“*the transferee*”) to whom there has been a transfer of the whole or any part of a business previously carried on by the original insurer, section 552 shall have effect in relation to that time, except where the chargeable event—
- (a) happened before the transfer, and
- (b) in the case of a death or an assignment, is an event of which the notification mentioned in subsection (6) or (7) of that section was given before the transfer,
as if the policy or contract had been issued, entered into or effected by the transferee.
- (3) Where, in consequence of . . . section 514(1) of ITTOIA 2005, paragraph (a) or (b) of section 552(1) requires certificates to be delivered in respect of two or more surrenders, happening in the same year, of part of or a share in the rights conferred by the policy or contract, a single certificate may be delivered under the paragraph in question in respect of all those surrenders (and may treat them as if they together constituted a single surrender) unless between the happening of the first and the happening of the last of them there has been—
- (a) an assignment of part of or a share in the rights conferred by the policy or contract; or
- (b) an assignment, otherwise than for money or money’s worth, of the whole of the rights conferred by the policy or contract.
- (4) Where the appropriate policy holder is two or more persons—
- (a) section 552(1)(a) requires a certificate to be delivered to each of them; but
- (b) nothing in section 552 or this section requires a body to deliver a certificate under subsection (1)(a) of that section to any person whose address has not been provided to the body (or to another body, at a time when the obligations under the policy or contract were obligations of that other body).
- (5) A certificate under section 552(1)(b) or (3)—
- (a) shall be in a form prescribed for the purpose by the Board; and
- (b) shall be delivered by any means prescribed for the purpose by the Board;
and different forms, or different means of delivery, may be prescribed for different cases or different purposes.
- (6) The Board may by regulations make such provision as they think fit for securing that they are able—
- (a) to ascertain whether there has been or is likely to be any contravention of the requirements of section 552 or this section; and
- (b) to verify any certificate under that section.
- (7) Regulations under subsection (6) above may include, in particular, provisions requiring persons to whom premiums under any policy are or have at any time been payable—
- (a) to supply information to the Board; and
- (b) to make available books, documents and other records for inspection on behalf of the Board.
- (8) Regulations under subsection (6) above may—
- (a) make different provision for different cases; and
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 552ZB
- (1) The Commissioners for Her Majesty's Revenue and Customs may make regulations—
- (a) requiring relevant persons—
- (i) to provide prescribed information to persons who apply for the issue of qualifying policies or who are, or may be, required to make statements under paragraph B3(2) of Schedule 15;
- (ii) to provide to an officer of Revenue and Customs prescribed information about qualifying policies which have been issued by them or in relation to which they are or have been a relevant transferee;
- (b) making such provision (not falling within paragraph (a)) as the Commissioners think fit for securing that an officer of Revenue and Customs is able—
- (i) to ascertain whether there has been or is likely to be any contravention of the requirements of the regulations or of paragraph B3(2) of Schedule 15;
- (ii) to verify any information provided to an officer of Revenue and Customs as required by the regulations.
- (2) The provision that may be made by virtue of subsection (1)(b) includes, in particular, provision requiring relevant persons to make available books, documents and other records for inspection by or on behalf of an officer of Revenue and Customs.
- (3) The regulations may—
- (a) make different provision for different cases or circumstances, and
- (b) contain incidental, supplementary, consequential, transitional, transitory or saving provision.
- (4) In this section—
- “*prescribed*” means prescribed by the regulations,
- “*qualifying policy*” includes a policy which would be a qualifying policy apart from—paragraph A1(2), B1(2), B2(2) or B3(3) of Schedule 15, orparagraph 17(2)(za) of that Schedule (including as applied by paragraph 18), and
- “*relevant person*” means a person—who issues, or has issued, qualifying policies, orwho is, or has been, a relevant transferee in relation to qualifying policies.
- (5) For the purposes of this section a person (“X”) is at any time a “*relevant transferee*” in relation to a qualifying policy if the obligations under the policy of its issuer are at that time the obligations of X as a result of there having been a transfer to X of the whole or any part of a business previously carried on by the issuer.
##### 552A
- (1) This section has effect for the purpose of securing that, where it applies to an overseas insurer, another person is the overseas insurer’s tax representative.
- (2) In this section “*overseas insurer*” means a person who is not resident in the United Kingdom who carries on a business which consists of or includes the effecting and carrying out of—
- (a) policies of life insurance;
- (b) contracts for life annuities; or
- (c) capital redemption policies.
- (3) This section applies to an overseas insurer—
- (a) if the condition in subsection (4) below is satisfied on the designated day; or
- (b) where that condition is not satisfied on that day, if it has subsequently become satisfied.
- (4) The condition mentioned in subsection (3) above is that—
- (a) there are in force relevant insurances the obligations under which are obligations of the overseas insurer in question or of an overseas insurer connected with him; and
- (b) the total amount or value of the gross premiums paid under those relevant insurances is £1 million or more.
- (5) In this section “*relevant insurance*” means any policy of life insurance, contract for a life annuity or capital redemption policy . . . in the case of which—
- (a) the holder is resident in the United Kingdom;
- (b) the obligations of the insurer are obligations of a person not resident in the United Kingdom; and
- (c) those obligations are not attributable to a branch or agency of that person’s in the United Kingdom.
- (6) Before the expiration of the period of three months following the day on which this section first applies to an overseas insurer, the overseas insurer must nominate to the Board a person to be his tax representative.
- (7) A person shall not be a tax representative unless—
- (a) if he is an individual, he is resident in the United Kingdom and has a fixed place of residence there, or
- (b) if he is not an individual, he has a business establishment in the United Kingdom,
and, in either case, he satisfies such other requirements (if any) as are prescribed in regulations made for the purpose by the Board.
- (8) A person shall not be an overseas insurer’s tax representative unless—
- (a) his nomination by the overseas insurer has been approved by the Board; or
- (b) he has been appointed by the Board.
- (9) The Board may by regulations make provision supplementing this section; and the provision that may be made by any such regulations includes provision with respect to—
- (a) the making of a nomination by an overseas insurer of a person to be his tax representative;
- (b) the information which is to be provided in connection with such a nomination;
- (c) the form in which such a nomination is to be made;
- (d) the powers and duties of the Board in relation to such a nomination;
- (e) the procedure for approving, or refusing to approve, such a nomination, and any time limits applicable to doing so;
- (f) the termination, by the overseas insurer or the Board, of a person’s appointment as a tax representative;
- (g) the appointment by the Board of a person as the tax representative of an overseas insurer (including the circumstances in which such an appointment may be made);
- (h) the nomination by the overseas insurer, or the appointment by the Board, of a person to be the tax representative of an overseas insurer in place of a person ceasing to be his tax representative;
- (j) circumstances in which an overseas insurer to whom this section applies may, with the Board’s agreement, be released (subject to any conditions imposed by the Board) from the requirement that there must be a tax representative;
- (k) appeals to the tribunal against decisions of the Board under this section or regulations under it.
- (10) The provision that may be made by regulations under subsection (9) above also includes provision for or in connection with the making of other arrangements between the Board and an overseas insurer for the purpose of securing the discharge by or on behalf of the overseas insurer of the relevant duties, within the meaning of section 552B.
- (11) Section 1122 of CTA 2010 (connected persons) applies for the purposes of this section.
- (12) In this section—
- “*capital redemption policy*” means a capital redemption policy in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect;
- “*contract for a life annuity*” means a contract for a life annuity in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect;
- “*the designated day*” means such day as the Board may specify for the purpose in regulations;
- “*policy of life insurance*” means a policy of life insurance in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect;
- “*tax representative*” means a tax representative under this section.
##### 552B
- (1) It shall be the duty of an overseas insurer’s tax representative to secure (where appropriate by acting on the overseas insurer’s behalf) that the relevant duties are discharged by or on behalf of the overseas insurer.
- (2) For the purposes of this section “*the relevant duties*” are—
- (a) the duties imposed by section 552,
- (b) the duties imposed by section 552ZA(2), (4) or (5), and
- (c) any duties imposed by regulations made under subsection (6) of section 552ZA by virtue of subsection (7) of that section,
so far as relating to relevant insurances under which the overseas insurer in question has any obligations.
- (3) An overseas insurer’s tax representative shall be personally liable—
- (a) in respect of any failure to secure the discharge of the relevant duties, and
- (b) in respect of anything done for purposes connected with acting on the overseas insurer’s behalf,
as if the relevant duties were imposed jointly and severally on the tax representative and the overseas insurer.
- (4) In the application of this section in relation to any particular tax representative, it is immaterial whether any particular relevant duty arose before or after his appointment.
- (5) This section has effect in relation to relevant duties relating to chargeable events happening on or after the day by which section 552A(6) requires the nomination of the overseas insurer’s first tax representative to be made.
- (5A) In subsection (5) “*chargeable event*” has the same meaning as in section 552 (see subsection (10) of that section).
- (6) Expressions used in this section and in section 552A have the same meaning in this section as they have in that section.
##### 553A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 553B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 553C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 559A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Cessation of approval: general provisions.
### Chapter 5A — Share loss relief
### Relief for losses on unquoted shares in trading companies
##### 576A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Qualifying trading companies: the requirements
##### 576B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Repayment supplements: companies.
##### 576C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Termination of relief under this Chapter, and transitional provisions.
##### 576E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Qualifying trading companies: supplementary provisions
##### 576J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
##### 576L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definition of insurance company.
##### 577A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 578A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 578B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on tax overpaid.
##### 581A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 582A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on payments in respect of corporation tax and meaning of “the material date".
##### 587A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 587B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 587BA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 587C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts etc.
##### 589A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 589B
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commencement.
##### 590A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 590B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 590C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Income arising under settlement where settlor retains an interest.
##### 596A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 596B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 596C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 599A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 605A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 606A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 611A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 611AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 611A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 617A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Revocable settlements allowing release of obligation.
#### Settlements made after 6th April 1965.
##### 631A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 634A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 636A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 637A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements made after 6th April 1965.
##### 640A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 641A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schedule 4 directions.
#### Interpretation.
##### 646A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Annuities: charge to tax
##### 648A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 648B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 650A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 651A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 653A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 658A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659A
- (1) For the purposes of sections . . . 613(4), 614(3) and (4) . . . —
- (a) “*investments*” (or “*investment*”) includes futures contracts and options contracts, and
- (b) income derived from transactions relating to such contracts shall be regarded as income derived from (or income from) such contracts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of subsection (1) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.
##### 659B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659E
- (1) The exemptions specified below do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP (see section 1004 of ITA 2007).
- (2) The exemptions are those provided by—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 613(4) (Parliamentary pension funds),
- section 614(3) (certain colonial, &c. pension funds),
- section 614(4) (the Overseas Service Pension Fund),
- section 614(5) (other pension funds for overseas employees),
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The income to which subsection (1) above applies includes relevant stock lending fees, in relation to any investments, to which any of the provisions listed in subsection (2) above would apply by virtue of section 129B.
- (4) Section 659A (treatment of futures and options) applies for the purposes of subsection (1) above.
### Chapter IA — Liability of settlor
### Main provisions
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660C
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplementary provisions
##### 660E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 674A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Adjustment of profits on averaging claim
##### 682A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### . . .
### . . .
##### 685A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits for certain financing income
##### 685F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits: failure to qualify for exemptions
##### 686A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
##### 686E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 687A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Chapter ID — Trust management expenses
##### 689A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 689B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 698A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 699A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 705A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 705B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionment of chargeable profits and creditable tax
#### General definition of offshore fund
#### Deductions: asset transferred within group.
##### 722A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company carrying on property business.
##### 726A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 727A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provision not at arm’s length.
##### 730A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 730B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 730BB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 730C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 774B and 774D: exceptions
##### 736A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 774B and 774D: exceptions
##### 736B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 736C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 736D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 774A to 774D: minor definitions etc
##### 737A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfers of rights to receive annual payments
##### 747A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 748ZA
- (1) Nothing in section 748(1)(da) prevents an apportionment falling to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company (“X”) if condition A, B or C is met.
- (2) Condition A is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in the absence of this subsection, in consequence of the scheme, section 748(1)(da) would apply to prevent an apportionment falling to be made as regards the relevant accounting period of X, and
- (b) the main purpose, or one of the main purposes, of any party to the scheme in entering into the scheme is to secure that section 748(1)(da) prevents an apportionment falling to be made as regards that period, or that period and one or more other accounting periods of X.
- (3) Condition B is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in consequence of the scheme profits are shifted to X from another company (“Y”),
- (b) the main purpose or one of the main purposes of any party to the scheme in entering into the scheme is to ensure that section 748(1)(da) prevents an apportionment falling to be made as regards the chargeable profits of one or more controlled foreign companies for one or more accounting periods, and
- (c) the relevant accounting period of X falls wholly or partly within that accounting period or those accounting periods.
- (4) For the purposes of subsection (3), profits are shifted to X from Y if it is reasonable to suppose that in the absence of the scheme, and any similar scheme, the whole or a part of the income which is reflected in X's profits would have been reflected in Y's profits.
- (5) Condition C is that, in determining X's chargeable profits for the relevant accounting period—
- (a) section 418(5) of CTA 2009 (loan relationships involving connected debtor and creditor where debits exceed credits) has effect so as to treat X, for the purposes of Part 5 of that Act, as bringing into account for that period credits in respect of a loan relationship, or
- (b) Part 21B of CTA 2010 (group mismatch schemes) has effect so as to exclude an amount from being brought into account as a debit or credit for the purposes of Part 5 of CTA 2009 (loan relationships) or Part 7 of that Act (derivative contracts).
- (6) For the purposes of this section—
- “*apportionment*” means an apportionment under section 747(3);
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions.
##### 748A
- (1) Nothing in section 748 prevents an apportionment under section 747(3) falling to be made as regards an accounting period of a controlled foreign company if the company—
- (a) is a company incorporated in a territory to which this section applies as respects that accounting period; or
- (b) is at any time in that accounting period liable to tax in such a territory by reason of domicile, residence or place of management; or
- (c) at any time in that accounting period carries on business through a permanent establishment in such a territory.
- (2) The condition in subsection (1)(c) above is not satisfied as regards an accounting period of a controlled foreign company if the business carried on by the company in that period through permanent establishments in territories to which this section applies, taken as a whole, is only a minimal part of the whole of the business carried on by the company in that period.
- (3) The territories to which this section applies as respects an accounting period of a controlled foreign company are those specified as such in regulations made by the Treasury.
- (4) Regulations under subsection (3) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such incidental, supplemental, consequential or transitional provision as the Treasury may think fit.
- (5) A statutory instrument containing regulations under subsection (3) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
##### 749A
- (1) An election under paragraph (d) or a designation under paragraph (e) of section 749(3) shall have effect in relation to—
- (a) the accounting period in relation to which it is made (“the original accounting period"), and
- (b) each successive accounting period of the controlled foreign company in question which precedes the next one in which the eligible territories are different,
and shall so have effect notwithstanding any change in the persons who have interests in the company or any change in the interests which those persons have in the company.
- (2) For the purposes of subsection (1)(b) above, an accounting period of the controlled foreign company is one in which the eligible territories are different if in the case of that accounting period—
- (a) at least one of the two or more territories which fell within subsection (1) of section 749 in the original accounting period does not fall within that subsection; or
- (b) some other territory also falls within that subsection.
- (3) Any election under section 749(3)(d)—
- (a) must be made by notice given to an officer of the Board;
- (b) must be made no later than twelve months after the end of the controlled foreign company’s accounting period in relation to which it is made;
- (c) must state, as respects each of the persons making it, the percentage of the chargeable profits and creditable tax (if any) of the controlled foreign company for that accounting period which it is likely would be apportioned to him on an apportionment under section 747(3) if one were made;
- (d) must be signed by the persons making it; and
- (e) is irrevocable.
- (4) Nothing in—
- (a) paragraph 10 of Schedule 18 to the Finance Act 1998 (claims or elections in company tax returns), or
- (b) Schedule 1A to the Management Act (claims or elections not included in returns),
shall apply, whether by virtue of section 754 or otherwise, to an election under section 749(3)(d).
- (5) A designation under section 749(3)(e) is irrevocable.
- (6) Where the Board make a designation under section 749(3)(e), notice of the making of the designation shall be given to every company resident in the United Kingdom which appears to the Board to have had an assessable interest in the controlled foreign company at any time during the accounting period of the controlled foreign company in relation to which the designation is made.
- (7) A notice under subsection (6) above shall specify—
- (a) the date on which the designation was made;
- (b) the controlled foreign company to which the designation relates;
- (c) the accounting period of the controlled foreign company in relation to which the designation is made; and
- (d) the territory designated.
- (8) Subsection (9) of section 749 has effect for the purposes of subsection (6) above as it has effect for the purposes of subsection (8) of that section.
- (9) For the purposes of this section the effect of any application under section 751A or 751AA shall be disregarded.
##### 749B
- (1) For the purposes of this Chapter, the following persons have an interest in a company—
- (a) any person who possesses, or is entitled to acquire, share capital or voting rights in the company;
- (b) any person who possesses, or is entitled to acquire, a right to receive or participate in distributions of the company;
- (c) any person who is entitled to secure that income or assets (whether present or future) of the company will be applied directly or indirectly for his benefit; and
- (d) any other person who, either alone or together with other persons, has control of the company.
- (2) Rights which a person has as a loan creditor of a company do not constitute an interest in the company for the purposes of this Chapter.
- (3) For the purposes of subsection (1)(b) above, the definition of “distribution" in Part 23 of CTA 2010 shall be construed without any limitation to companies resident in the United Kingdom.
- (4) References in subsection (1) above to being entitled to do anything apply where a person—
- (a) is presently entitled to do it at a future date, or
- (b) will at a future date be entitled to do it;
but a person whose entitlement to secure that any income or assets of the company will be applied as mentioned in paragraph (c) of that subsection is contingent upon a default of the company or any other person under any agreement shall not be treated as falling within that paragraph unless the default has occurred.
- (5) Where a company has an interest in another company and a third person has, or two or more persons together have, an interest in the first company (as in a case where one company has a shareholding in a controlled foreign company and the first company is controlled by a third company or by two or more persons together) subsections (6) and (7) below apply.
- (6) Where this subsection applies, the person who has, or each of the persons who together have, the interest in the first company shall be regarded for the purposes of this Chapter as thereby having an interest in the second company.
- (7) In any case where this subsection applies, in construing references in this Chapter to one person having the same interest as another, the person or, as the case may be, each of the persons who together have, the interest in the first company shall be treated as having, to the extent of that person’s interest in that company, the same interest as the first company has in the second company.
- (8) Where two or more persons jointly have an interest in a company otherwise than in a fiduciary or representative capacity, they shall be treated for the purposes of this Chapter as having the interest in equal shares.
##### 750A
- (1) Where—
- (a) in any accounting period a company is to be regarded by virtue of any of subsections (1) to (4) of section 749 as resident in a particular territory outside the United Kingdom, and
- (b) within the meaning of section 750(1), the local tax in respect of the profits arising to the company in that accounting period is equal to or greater than three-quarters of the corresponding United Kingdom tax on those profits, but
- (c) that local tax is determined under designer rate tax provisions,
the company shall be taken for the purposes of this Chapter to be subject to a lower level of taxation in that territory in that accounting period.
- (2) In subsection (1) above “*designer rate tax provisions*” means provisions—
- (a) which appear to the Board to be designed to enable companies to exercise significant control over the amount of tax which they pay; and
- (b) which are specified in regulations made by the Board.
- (3) Regulations under subsection (2) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such supplementary, incidental, consequential or transitional provision as the Board may think fit.
- (4) The first regulations under subsection (2) above may make provision having effect in relation to accounting periods beginning not more than fifteen months before the date on which the regulations are made.
##### 751A
- (1) This section applies if—
- (a) pursuant to an employer-financed retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and
- (b) the payment is made under such an insurance or contract as is mentioned in section 266.
This section applies whether or not the accrual of the relevant benefits is dependent on any contingency.
- (2) Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if—
- (a) the payment had been made by him, and
- (b) the insurance or contract under which the payment is made had been made with him.
- (3) For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.
- (4) If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them.
- (5) The amount treated as paid for or in respect of each employee is—
$$A×BC$where—A is the sum paid,B is the amount which would have had to be paid to secure the benefits to be provided for or in respect of the employee in question, andC is the total amount which would have had to be paid to secure the benefits to be provided for or in respect of all the employees if separate payments had been made in the case of each of them.$
- (6) This section does not apply if—
- (a) in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or
- (b) the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met.
- (7) Those conditions are—
- (a) that the employment is with a foreign employer, and
- (b) that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme.
- (8) In subsection (6)(a) “*earnings charged on remittance*” means earnings which are taxable earnings under—
- (a) section 22 of ITEPA 2003 (chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK), or
- (b) section 26 of that Act (foreign earnings for year when employee resident, but not ordinarily resident, in UK).
- (9) In this section—
- “*employer-financed retirement benefits scheme*”, and
- “*relevant benefits*”,
- have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).
#### Modifications for change of tax basis
##### 282A
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##### 282B
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#### Modifications in relation to BLAGAB group reinsurers
##### 289A
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##### 289B
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##### 290A
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#### Transfers of life assurance business: trade losses of the transferor
##### 291A
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##### 291B
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##### 299A
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##### 299B
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##### 300A
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##### 301A
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##### 303AA
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#### Retained assets
##### 303A
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#### Transfer schemes: reduction of income of transferee
##### 304A
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##### 305A
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#### Taxation in respect of other business: incorporated friendly societies qualifying for exemption.
#### Transfers of other business
##### 326A
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##### 326B
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##### 326BB
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##### 326C
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##### 326D
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##### 327A
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#### Long-term business: application of the Corporation Tax Acts.
##### 329AA
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##### 329AB
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##### 329A
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##### 329B
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##### 329C
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##### 331A
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##### 332A
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##### 333A
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##### 333B
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##### 338B
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##### 337A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 338A
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##### 339A
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##### 342A
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#### Transfers of trade to obtain balancing allowances
#### Interpretative provisions relating to insurance companies.
##### 343ZA
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##### 343A
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#### Exemption for trade unions and employers’ associations.
#### Dividends paid to investment trusts.
#### Building societies: time for payment of tax.
##### 347A
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##### 347B
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#### Relevant deposits: computation of tax on interest.
##### 349ZA
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##### 349A
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#### Election that assets not be foreign business assets
##### 349B
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##### 349C
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##### 349D
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##### 349E
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##### 350A
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##### 356A
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##### 356B
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##### 356C
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##### 356D
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#### Section 432B apportionment: supplementary provisions.
##### 357A
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##### 357B
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##### 357C
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##### 360A
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#### Profits reserved for policy holders and annuitants.
#### Returns.
##### 367A
- (1) Sections 353 and 365 have effect as if—
- (a) purchase and resale arrangements involved the making of a loan, and
- (b) alternative finance return were interest.
- (2) Section 366 has effect accordingly.
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) throughout that period the controlled foreign company has a business establishment in an EEA territory,
- (c) throughout that period there are individuals who work for the controlled foreign company in that territory, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) those chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in those chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the amount (if any) equal to so much of those chargeable profits as can reasonably be regarded as representing the net economic value which—
- (a) arises to the appropriate body of persons (taken as a whole), and
- (b) is created directly by qualifying work.
- (5) For the purposes of subsection (4) “*net economic value*” does not include any value which derives directly or indirectly from the reduction or elimination of any liability of any person to any tax or duty imposed under the law of any territory.
- (6) For the purposes of subsection (4) “*the appropriate body of persons*” means—
- (a) if the controlled foreign company is not a member of a group of companies, the controlled foreign company and the persons who have an interest in it at any time in the relevant accounting period, and
- (b) if the controlled foreign company is a member of a group of companies, all the persons falling within paragraph (a) and any other person who is a member of that group of companies,
and for the purposes of this subsection “*group of companies*” means a company and any other companies of which it has control.
- (7) For the purposes of subsection (4) “*qualifying work*” means work which—
- (a) is done in any EEA territory in which the controlled foreign company has a business establishment throughout the relevant accounting period, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (8) Any reference in this section to a business establishment of a controlled foreign company in an EEA territory is to be construed in accordance with paragraph 7 of Schedule 25 (but as if the reference in that paragraph to the territory in which the company is resident were to the EEA territory).
- (9) For the purposes of this section individuals are not to be regarded as working for a company in any territory unless—
- (a) they are employed by the company in the territory, or
- (b) they are otherwise directed by the company to perform duties on its behalf in the territory.
#### Leased assets subject to hire-purchase agreements.
##### 751AA
- (1) This section applies if—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) the chargeable profits of the controlled foreign company for the relevant accounting period would, apart from this section, include an amount of income in respect of a payment made by another company (“the payer”),
- (c) the amount that the payer brings into account for the purposes of corporation tax in respect of the payment is reduced (in part or in full) by virtue of Part 3 of Schedule 15 to FA 2009 (tax treatment of financing costs and income), and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in the relevant accounting period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the relevant amount.
- (5) In subsection (4) “*the relevant amount*” means the amount (if any) by which it is just and reasonable that the chargeable profits should be treated as reduced, having regard to the effect of Parts 3 and 4 of Schedule 15 to FA 2009 on amounts brought into account for the purposes of corporation tax by the payer, or any other company.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 751AB
- (1) This section applies if—
- (a) an apportionment under section 747(3) would fall to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) but for a relevant failure, section 748(1)(ba) or (bb) would have prevented such an apportionment, and
- (c) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) “*Relevant failure*” means—
- (a) in the case of section 748(1)(ba), one or both of the following—
- (i) a failure to satisfy the requirement of paragraph 12E of Schedule 25 (requirement as to company's UK connection) in circumstances where the requirement would be satisfied if the reference in sub-paragraph (3)(a) of that paragraph to 10% were a reference to 50%, and
- (ii) a failure to satisfy the requirement of paragraph 12F of that Schedule (finance income and relevant IP income) in circumstances where the relevant IP income of the controlled foreign company for the accounting period does not exceed 5% of the company's gross income for that period, and
- (b) in the case of section 748(1)(bb), a failure to satisfy the requirement of paragraph 12M of that Schedule (finance income).
- (3) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced to an amount specified in the application (“*the specified amount*”).
The specified amount may be nil.
- (4) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (5) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AC.
- (6) “*The relevant amount*” means—
- (a) if the relevant failure is within subsection (2)(a), the sum of—
- (i) the excess finance and IP income (if any) for the relevant accounting period, and
- (ii) in a case where there is a failure specified in subsection (2)(a)(i), so much (if any) of the net chargeable profits for that period as are not excluded by subsection (8), and
- (b) if the relevant failure is within subsection (2)(b)—
- (i) the amount (if any) by which the controlled foreign company's finance income for the relevant accounting period exceeds 5% of its gross income for that period, or
- (ii) if that amount is a negligible amount, nil.
- (7) “The excess finance and IP income” for the relevant accounting period means—
- (a) the amount (if any) by which the total of the controlled foreign company's finance income and relevant IP income for that period exceeds 5% of its gross income for that period, or
- (b) if that amount is a negligible amount, nil.
- (8) Net chargeable profits are excluded by this subsection if, and to the extent that, they can reasonably be regarded—
- (a) as representing the net economic value which—
- (i) arises to the appropriate body of persons (taken as a whole), and
- (ii) is created directly by qualifying work, or
- (b) as not being wholly or partly attributable, directly or indirectly, to transactions with persons within the charge to United Kingdom tax.
- (9) In subsection (8)(a) “*qualifying work*” means work which—
- (a) is done in the territory in which the controlled foreign company is resident, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (10) A transaction with a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there is within subsection (8)(b) only if the transaction is attributable to activities carried on through that establishment.
- (11) For the purposes of subsections (8) and (9)—
- (a) section 751A(5), (6) and (9) applies as it applies for the purposes of the equivalent provisions of section 751A, and
- (b) paragraph 5(2) to (5) of Schedule 25 (residence of controlled foreign company) applies as it applies in relation to Part 2 of that Schedule.
- (12) In this section—
- “*finance income*” has the meaning given by paragraph 12F(3) of Schedule 25 (with references to C read as references to the controlled foreign company);
- “*relevant IP income*” has the meaning given by paragraph 12F(4) of that Schedule;
- “*net chargeable profits*” means chargeable profits excluding so much of those profits as is directly attributable to the finance income or relevant IP income of the controlled foreign company;
- “*UK-connected gross income*” has the same meaning as in paragraph 12E of Schedule 25;
- “*United Kingdom tax*” means corporation tax or income tax;
and paragraph 12G of that Schedule (gross income) applies for the purposes of this section as it applies for the purposes of Part 2A of that Schedule (with references to C read as references to the controlled foreign company).
#### The approved amount: passenger payments
##### 751AC
- (1) This section applies if—
- (a) an exempt period in relation to a controlled foreign company ends in accordance with paragraph 15F(2) of Schedule 25 (time exempt period ends if there is an early termination event), other than by reason of an early termination event within paragraph 15F(3)(b),
- (b) an accounting period (“*the relevant accounting period*”) of the company ends after that exempt period but before the time the exempt period would have ended had paragraph 15F(2) of that Schedule not applied,
- (c) an apportionment under section 747(3) would fall to be made as regards the relevant accounting period, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for that accounting period (“the chargeable profits”) to be reduced to an amount (“*the specified amount*”) specified in the application (which may be nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AB.
- (5) “*The relevant amount*” means the amount (if any) equal to so much of the chargeable profits as it is just and reasonable to regard as referable to—
- (a) the relevant transaction which triggered the end of the exempt period, or
- (b) any later relevant transaction occurring before the time the exempt period would have ended had paragraph 15F(2) of Schedule 25 not applied.
- (6) “*Relevant transaction*” has the meaning given by paragraph 15E of Schedule 25 (and it does not matter if the transaction occurs pursuant to an agreement entered into by the controlled foreign company before the relevant time (within the meaning of paragraph 15G of that Schedule)).
#### Restriction of relief for payments of interest.
##### 751B
- (1) An application by a company under section 751A or 751AA—
- (a) must be made in such form as the HMRC Commissioners may determine,
- (b) must be accompanied by such documents (or copies of documents) in the company's possession or power as those Commissioners may reasonably require for the purpose of determining whether to grant the application, and
- (c) must contain such information as those Commissioners may reasonably require for that purpose.
- (2) An application by a company under section 751A or 751AA—
- (a) may be made at any time on or before the filing date (within the meaning of Schedule 18 to the Finance Act 1998) for the relevant company tax return of the company, and
- (b) may be amended or withdrawn at any time before the application is determined by those Commissioners.
- (3) If an application by a company under section 751A or 751AA is granted after the company has delivered its relevant company tax return, it has 30 days beginning with the day on which the application is granted in which to amend that return to give effect to section 751A or 751AA.
- (4) The time limits otherwise applicable to an amendment of a company tax return do not prevent an amendment being made under subsection (3).
- (5) If the HMRC Commissioners refuse an application by a company under section 751A or 751AA, the company may appeal . . . against the refusal.
- (6) Notice of an appeal must be given in writing to the HMRC Commissioners within 30 days after the application is refused.
- (7) On an appeal—
- (a) if the tribunal is satisfied that the relevant amount is a different amount from the amount specified in the application, it must direct the HMRC Commissioners to grant the application as if the amount specified in it were that different amount,
- (b) if the tribunal is satisfied that the relevant amount is the amount specified in the application, it must direct the HMRC Commissioners to grant the application, and
- (c) in any other case, the tribunal must confirm the refusal.
- (8) For the purposes of subsection (7) “*the relevant amount*”—
- (a) in the case of an appeal in respect of the refusal of an application under section 751A, means the amount (if any) equal to so much of the chargeable profits mentioned in subsection (4) of section 751A as can reasonably be regarded as representing the value mentioned in that subsection , and
- (b) in the case of an appeal in respect of the refusal of an application under section 751AA, has the meaning given by subsection (5) of that section.
- (9) Part 5 of the Management Act (appeals), apart from section 50, applies in relation to an appeal under this section as it applies in relation to an appeal against an assessment to tax.
- (10) In this section “*relevant company tax return*”, in relation to a company, means the return for the accounting period for which—
- (a) any sum is chargeable on the company under section 747(4)(a), or
- (b) any sum would be so chargeable but for section 751A or 751AA,
in respect of the chargeable profits of the controlled foreign company for the accounting period mentioned in section 751A(1) or 751AA(1).
- (11) In this section “*the HMRC Commissioners*” means the Commissioners for Her Majesty's Revenue and Customs.
#### Employment
##### 752A
- (1) This section has effect for the purpose of determining for the purposes of this Chapter who has a relevant interest in a controlled foreign company at any time; and references in this Chapter to relevant interests shall be construed accordingly.
- (2) A UK resident company which has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (3) below otherwise provides.
- (3) A UK resident company which has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if it has the interest by virtue of having a direct or indirect interest in another UK resident company.
- (4) A related person who has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (5) or (6) below otherwise provides.
- (5) A related person who has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if he has the interest by virtue of having a direct or indirect interest in—
- (a) a UK resident company; or
- (b) another related person.
- (6) A related person who has a direct or indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest to the extent that a UK resident company—
- (a) has the whole or any part of the same interest indirectly, by virtue of having a direct or indirect interest in the related person, and
- (b) by virtue of that indirect interest in the controlled foreign company, has a relevant interest in the company by virtue of subsection (2) above.
- (7) A person who—
- (a) has a direct interest in a controlled foreign company, but
- (b) does not by virtue of subsections (2) to (6) above have a relevant interest in the company by virtue of that interest,
has a relevant interest in the company by virtue of that interest unless subsection (8) below otherwise provides.
- (8) A person does not by virtue of subsection (7) above have a relevant interest in a controlled foreign company by virtue of having a direct interest in the company to the extent that another person—
- (a) has the whole or any part of the same interest indirectly, and
- (b) by virtue of that indirect interest, has a relevant interest in the company by virtue of subsections (2) to (6) above.
- (9) No person has a relevant interest in a controlled foreign company otherwise than as provided by subsections (2) to (8) above.
- (10) In this section—
- “*related person*” means a person who—is not a UK resident company, butis connected or associated with a UK resident company which has by virtue of subsection (2) above a relevant interest in the controlled foreign company in question;
- “*UK resident company*” means a company resident in the United Kingdom.
##### 752B
- (1) For the purposes of section 752(3) above, where a person has a relevant interest in a controlled foreign company by virtue of indirectly holding issued ordinary shares of the company, the percentage of the issued ordinary shares of the company which the relevant interest represents is equal to—
$$P×S$where—P is the product of the appropriate fractions of that person and each of the share-linked companies through which he indirectly holds the shares in question, other than the lowest share-linked company; andS is the percentage of issued ordinary shares of the controlled foreign company which is held directly by the lowest share-linked company.$
- (2) In subsection (1) above and this subsection—
- “the appropriate fraction", in the case of a person who directly holds ordinary shares of a share-linked company, means that fraction of the issued ordinary shares of that company which his holding represents;
- “*the lowest share-linked company*”, in relation to a person who indirectly holds ordinary shares of a controlled foreign company, means the share-linked company which directly holds the shares in question;
- “*share-linked company*” means a company which is share-linked to the controlled foreign company in question.
- (3) Where a person has different indirect holdings of shares of the controlled foreign company (as in a case where different shares are held through different companies which are share-linked to the controlled foreign company)—
- (a) subsection (1) above shall apply separately in relation to the different holdings with any necessary modifications; and
- (b) for the purposes of section 752(3) above the percentage of the issued ordinary shares of the company which the relevant interest represents is the aggregate of the percentages resulting from those separate applications.
- (4) Where, for the purposes of subsection (3) of section 752, the percentage of the issued ordinary shares of the controlled foreign company which a person directly or indirectly holds varies during the relevant accounting period, he shall be treated for the purposes of that subsection as holding throughout that period that percentage of the issued ordinary shares of the company which is equal to the sum of the relevant percentages for each holding period in the relevant accounting period.
- (5) For the purposes of subsection (4) above—
- “holding period", in the case of any person, means a part of the relevant accounting period during which the percentage of the issued ordinary shares of the controlled foreign company which the person holds (whether directly or indirectly) remains the same;
- “the relevant percentage", in the case of a holding period, means the percentage equal to—$P×HA$where—P is the percentage of the issued ordinary shares of the controlled foreign company which the person in question directly or indirectly holds in the holding period, as calculated in accordance with subsections (1) to (3) above so far as applicable;H is the number of days in the holding period; andA is the number of days in the relevant accounting period.
##### 752C
- (1) In this section “*the relevant provisions*” means sections 752 to 752B and this section.
- (2) For the purposes of the relevant provisions—
- (a) a person has a direct interest in a company if (and only if) he has an interest in the company otherwise than by virtue of having an interest in another company;
- (b) a person has an indirect interest in a company if (and only if) he has an interest in the company by virtue of having an interest in another company;
- (c) a person indirectly holds shares of a controlled foreign company if (and only if) he directly holds ordinary shares of a company which is share-linked to the controlled foreign company.
- (3) For the purposes of the relevant provisions, a company is “share-linked" to a controlled foreign company if it has an interest in the controlled foreign company only by virtue of directly holding ordinary shares—
- (a) of the controlled foreign company, or
- (b) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) above, or
- (c) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) or (b) above,
and so on.
- (4) For the purposes of the relevant provisions, a company (“company A") has an intermediate interest in a controlled foreign company if (and only if)—
- (a) it has a direct or indirect interest in the controlled foreign company; and
- (b) one or more other persons have relevant interests in the controlled foreign company by virtue of having a direct or indirect interest in company A.
- (5) Any interest or shares held by a nominee or bare trustee shall be treated for the purposes of the relevant provisions as held by the person or persons for whom the nominee or bare trustee holds the interest or shares.
- (6) Where—
- (a) an interest in a controlled foreign company is held in a fiduciary or representative capacity, and
- (b) subsection (5) above does not apply, but
- (c) there are one or more identifiable beneficiaries,
the interest shall be treated for the purposes of the relevant provisions as held by that beneficiary or, as the case may be, as apportioned on a just and reasonable basis among those beneficiaries.
- (7) In the relevant provisions—
- “*bare trustee*” means a person acting as trustee—for a person absolutely entitled as against the trustee; orfor any person who would be so entitled but for being a minor or otherwise under a disability; orfor two or more persons who are or would, but for all or any of them being a minor or otherwise under a disability, be jointly so entitled;
- “ordinary shares", in the case of any company, means shares of a single class, however described, which is the only class of shares issued by the company;
- “*the relevant accounting period*” means the accounting period mentioned in section 752(1);
- “*share*” includes a reference to a fraction of a share.
##### 754A
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##### 754B
- (1) This section has effect where a determination requiring the Board’s sanction is made for any of the following purposes, that is to say—
- (a) the giving of a closure notice; or
- (b) the making of a discovery assessment.
- (2) If the closure notice or, as the case may be, notice of the discovery assessment is given to any person without—
- (a) the determination, so far as it is taken into account in the closure notice or the discovery assessment, having been approved by the Board, or
- (b) notification of the Board’s approval having been served on that person at or before the time of the giving of the notice,
the closure notice or, as the case may be, the discovery assessment shall be deemed to have been given or made (and in the case of an assessment notified) in the terms (if any) in which it would have been given or made had that determination not been taken into account.
- (3) A notification under subsection (2)(b) above—
- (a) must be in writing;
- (b) must state that the Board have given their approval on the basis that—
- (i) an amount of chargeable profits, and
- (ii) an amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question fall to be apportioned under section 747(3) to the person in question;
- (c) must state the amounts mentioned in sub-paragraphs (i) and (ii) of paragraph (b) above; and
- (d) subject to paragraphs (a) to (c) above, may be in such form as the Board may determine.
- (4) For the purposes of this section, the Board’s approval of a determination requiring their sanction—
- (a) must be given specifically in relation to the case in question and must apply to the amount determined; but
- (b) subject to that, may be given by the Board (either before or after the making of the determination) in any such form or manner as they may determine.
- (5) In this section references to a determination requiring the Board’s sanction are references (subject to subsection (6) below) to any determination of the amount of chargeable profits or creditable tax for an accounting period of a controlled foreign company which falls to be apportioned to a particular person under section 747(3).
- (6) For the purposes of this section, a determination shall be taken, in relation to a closure notice or a discovery assessment, not to be a determination requiring the Board’s sanction if—
- (a) an agreement about the relevant amounts has been made between an officer of the Board and the person in whose case it is made;
- (b) that agreement is in force at the time of the giving of the closure notice or, as the case may be, notice of the assessment; and
- (c) the matters to which the agreement relates include the amount determined.
- (7) In paragraph (a) of subsection (6) above, “*the relevant amounts*” means—
- (a) the amount of chargeable profits, and
- (b) the amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question which fall to be apportioned under section 747(3) to the person mentioned in that paragraph.
- (8) For the purposes of subsection (6) above an agreement made between an officer of the Board and any person (“the taxpayer") in relation to any matter shall be taken to be in force at any time if, and only if—
- (a) the agreement is one which has been made or confirmed in writing;
- (b) that time is after the end of the period of thirty days beginning—
- (i) in the case of an agreement made in writing, with the day of the making of the agreement, and
- (ii) in any other case, with the day of the agreement’s confirmation in writing; and
- (c) the taxpayer has not, before the end of that period of thirty days, served a notice on an officer of the Board stating that he is repudiating or resiling from the agreement.
- (9) The references in subsection (8) above to the confirmation in writing of an agreement are references to the service on the taxpayer by an officer of the Board of a notice—
- (a) stating that the agreement has been made; and
- (b) setting out the terms of the agreement.
- (10) The matters that may be questioned on so much of any appeal by virtue of any provision of the Management Act or Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters) as relates to a determination the making of which has been approved by the Board for the purposes of this section shall not include the Board’s approval, except to the extent that the grounds for questioning the approval are the same as the grounds for questioning the determination itself.
- (11) In this section—
- “*closure notice*” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998 (completion of enquiry and statement of conclusions);
- “*discovery assessment*” means a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule).
##### 755A
- (1) This section applies in any case where—
- (a) an amount (“the apportioned profit") of a controlled foreign company’s chargeable profits for an accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (b) the UK company carries on life assurance business in that one of its accounting periods (“the relevant accounting period") in which ends the accounting period of the controlled foreign company; and
- (c) the property or rights which represent the UK company’s relevant interest in the controlled foreign company constitute to any extent assets of the UK company’s long-term insurance fund.
- (2) Subsections (3) and (4) below apply if, in the case of the relevant accounting period, the UK company is charged to tax under the I minus E basis in respect of life assurance business.
- (3) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 in relation to the policy holders’ part of any BLAGAB apportioned profit shall be—
- (a) if a single rate of tax under section 88(1) of the Finance Act 1989 (lower corporation tax rate on certain insurance company profits) is applicable in relation to the relevant accounting period, that rate; or
- (b) if more than one such rate of tax is applicable in relation to the relevant accounting period, the average of those rates over the whole of that period.
- (4) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 shall be nil in relation to so much of the apportioned profit as is referable to gross roll-up business carried on by the UK company.
- (4A) In any case where—
- (a) paragraph 4 of Schedule 26 to this Act applies to a dividend received by the UK company, and
- (b) but for this subsection, subsection (5) of section 97 of TIOPA 2010 would apply to that dividend,
the amount of credit for foreign tax in respect of that dividend shall be treated, for the purposes of that section, as wholly attributable to basic life assurance and general annuity business.
- (5) If, in the case of the relevant accounting period, the UK company is charged to tax under section 35 of CTA 2009 (charge on trade profits) in respect of its profits from life assurance business, the “*appropriate rate*” for the purposes of—
- (a) section 747(4)(a), and
- (b) paragraph 1 of Schedule 26,
shall be nil in relation to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of its long-term insurance fund.
- (6) If, in the case of the relevant accounting period,—
- (a) the UK company is charged to tax under the I minus E basis in respect of life assurance business,
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company, and
- (c) the apportioned profit is to any extent referable to gross roll-up business,
so much of the creditable tax so apportioned as is attributable to the apportioned profit so far as so referable shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (7) If, in the case of the relevant accounting period,—
- (a) the UK company is charged to tax under section 35 of CTA 2009 in respect of its profits from life assurance business, and
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company,
so much of the creditable tax so apportioned as is attributable to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of the UK company’s long-term insurance fund shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (8) Any set off under paragraph 1 . . . of Schedule 26 against the UK company’s liability to tax under section 747(4)(a) in respect of the apportioned profit shall be made against only so much of that liability as is attributable to the eligible part of the apportioned profit.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) For the purposes of this section, the “eligible part" of the apportioned profit is any BLAGAB apportioned profit, other than the policy holders’ part.
- (11) For the purposes of this section the policy holders' part of any BLAGAB apportioned profit is—
- (a) where subsection (11A) below applies, the whole of that profit, and
- (b) in any other case, the relevant fraction (within the meaning of subsection (11B) below) of that profit.
- (11A) This subsection applies if—
- (a) the UK company’s life assurance business is mutual business,
- (b) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is equal to all those profits, or
- (c) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is more than its BLAGAB profits for that period.
- (11B) The relevant fraction for the purposes of subsection (11)(b) above is the fraction arrived at by dividing—
- (a) the policy holders' share of the UK company’s relevant profits for the relevant accounting period, by
- (b) the UK company’s BLAGAB profits for that period.
- (11BA) But where the BLAGAB profits for the relevant accounting period are nil, the relevant fraction—
- (a) if there are section 35 profits of the accounting period in respect of its life assurance business, is nil, and
- (b) otherwise, is such fraction as is just and reasonable;
and for this purpose there are section 35 profits if there are profits computed in accordance with the life assurance trade profits provisions after making adjustments in respect of losses in accordance with section 85A(4) of the Finance Act 1989.
- (11C) In subsections (11A) and (11B) above—
- (a) references to the policy holders' share of the UK company’s share of the relevant profits are to be construed in accordance with sections 88(3) and 89 of the Finance Act 1989, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) In this section—
- “*BLAGAB apportioned profit*” means so much of the apportioned profit as is referable to basic life assurance and general annuity business carried on by the UK company;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) For the purposes of this section, the part of the apportioned profit which is referable to—
- (a) basic life assurance and general annuity business, or
- (ba) gross roll-up business,
carried on by the UK company is the part which would have been so referable under section 432A had the apportioned profit been a dividend paid to the UK company at the end of the accounting period mentioned in subsection (1)(a) above in respect of the property or rights which represent the UK company’s relevant interest in the controlled foreign company.
- (14) For the purposes of this section, any attribution of creditable tax to a particular part of the apportioned profit shall be made in the proportion which that part of the apportioned profit bears to the whole of the apportioned profit.
##### 755B
- (1) This section applies where—
- (a) a controlled foreign company carries on general insurance business in an accounting period;
- (b) an amount of the company’s chargeable profits, and an amount of its creditable tax (if any), for that accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (c) the UK company delivers a company tax return for that one of its accounting periods in which the controlled foreign company’s accounting period ends; and
- (d) in making or amending the return, the UK company has regard to accounts of the controlled foreign company drawn up using a method falling within subsection (2) below.
- (2) The methods which fall within this subsection are—
- (a) the method described in paragraph 58 in Section E of Part 2 of Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (which provides for a technical provision to be made in the accounts which is later replaced by a provision for estimated claims outstanding); and
- (b) any method which would have fallen within paragraph (a) above, had final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 58 of that Schedule, taken place, and been required to take place, no later than the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (3) Where this section applies—
- (a) the UK company may make any amendments of its company tax return arising from the replacement of the technical provision in the controlled foreign company’s accounts at any time within twelve months from the date on which the provision was replaced; and
- (b) notice of intention to enquire into the return under paragraph 24 of Schedule 18 to the Finance Act 1998 may be given at any time up to two years from that date (or at any later time in accordance with the general rule in sub-paragraph (3) of that paragraph).
- (4) If, in a case where this section applies, the accounts of the controlled foreign company are drawn up using a method falling within paragraph (b) of subsection (2) above—
- (a) the controlled foreign company, and
- (b) any person with an interest in the controlled foreign company,
shall be treated for the purposes of this section as if final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 58 of Schedule 3 to those Regulations, had taken place at, and been required to take place no later than, the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (5) Regulations under section 755C may make provision with respect to the determination of the amount of the provision by which the technical provision is to be treated as replaced in cases falling within subsection (4) above.
- (6) In this section “general insurance business” means business which consists of the effecting or carrying out of contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
##### 755C
- (1) The Treasury may by regulations provide for the provisions of this Chapter to have effect with prescribed modifications in any case where a non-resident company—
- (a) carries on general insurance business; and
- (b) draws up accounts relating to that business using a method falling within subsection (2) of section 755B.
- (2) Regulations under subsection (1) above may—
- (a) make different provision for different cases;
- (b) make provision having effect in relation to accounting periods of non-resident companies ending not more than one year before the date on which the regulations are made; and
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit.
- (3) In this section—
- “*alternative finance return*” has the meaning given in sections 564I to 564L of ITA 2007, and
- “*purchase and resale arrangements*” means arrangements to which section 564C of ITA 2007 applies.
#### Securities.
##### 374A
- (1) This section applies where, in the case of any loan, interest on the loan never has been relevant loan interest or the borrower never has been a qualifying borrower.
- (2) Without prejudice to subsection (3) below, in relation to a payment of interest—
- (a) as respects which either of the conditions mentioned in paragraphs (a) and (b) of section 374(1) is fulfilled, and
- (b) from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment of interest were a payment of relevant loan interest made by a qualifying borrower.
- (3) Nothing in subsection (2) above shall be taken as regards the borrower as entitling him to make any deduction or to retain any amount deducted and, accordingly, where any amount has been deducted, he shall be liable to make good that amount and an officer of the Board may make such assessments as may in his judgment be required for recovering that amount.
- (4) The Management Act shall apply to an assessment under subsection (3) above as if it were an assessment to income tax for the year of assessment in which the deduction was made . . . .
- (5) If the borrower fraudulently or negligently makes any false statement or representation in connection with the making of any deduction, he shall be liable to a penalty not exceeding the amount deducted.
##### 375A
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##### 376A
- (1) The Board shall maintain, and publish in such manner as they consider appropriate, a register for the purposes of section 376(4).
- (1A) The following are entitled to be registered—
- (a) a person who has permission under Part 4 of the Financial Services and Markets Act 2000—
- (i) to accept deposits; or
- (ii) to effect or carry out contracts of general insurance;
- (b) a 90 per cent subsidiary of a person mentioned in—
- (i) section 376(4)(e); or
- (ii) paragraph (a) above;
- (c) any other body whose activities and objects appear to the Board to qualify it for registration.
- (2) If the Board are satisfied that an applicant for registration is entitled to be registered, they may register the applicant generally or in relation to any description of loan specified in the register, with effect from such date as may be so specified; and a body which is so registered shall become a qualifying lender in accordance with the terms of its registration.
- (3) The registration of any body may be varied by the Board—
- (a) where it is general, by providing for it to be in relation to a specified description of loan, or
- (b) where it is in relation to a specified description of loan, by removing or varying the reference to that description of loan,
and where they do so, they shall give the body written notice of the variation and of the date from which it is to have effect.
- (4) If it appears to the Board at any time that a body which is registered under this section would not be entitled to be registered if it applied for registration at that time, the Board may by written notice given to the body cancel its registration with effect from such date as may be specified in the notice.
- (5) The date specified in a notice under subsection (3) or (4) above shall not be earlier than the end of the period of 30 days beginning with the date on which the notice is served.
- (6) Any body which is aggrieved by the failure of the Board to register it under this section, or by the variation or cancellation of its registration, may appeal, by notice given to the Board before the end of the period of 30 days beginning with the date on which the body is notified of the Board’s decision. . . .
### Losses from UK property business or overseas property business
##### 379A
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##### 379B
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#### Information: supplementary provisions
##### 384A
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### Losses from UK property business or overseas property business
##### 392A
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##### 392B
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##### 393A
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##### 393B
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#### Relief for individuals.
##### 403ZA
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##### 403ZB
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##### 403ZC
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##### 403ZD
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##### 403ZE
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##### 403A
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##### 403B
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##### 403C
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##### 403D
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##### 403E
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##### 403F
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##### 403G
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##### 411ZA
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##### 411A
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#### Transfers of business: election for transferee to pay tax of transferor
#### Conditions for approval of retirement benefit schemes.
#### Cessation of approval: tax on certain schemes.
#### Modification of s. 444BA for mutual or overseas business and for non-resident companies.
#### Taxation in respect of other business: incorporated friendly societies qualifying for exemption.
##### 431ZA
- (1) An insurance company may, in its company tax return for the first accounting period of the company beginning on or after 1 January 2008 in which any of the assets of the company's long-term insurance fund would (apart from this section) be foreign business assets, elect that none of the assets of the company's long-term insurance fund are to be regarded for the purposes of this Act as being foreign business assets.
- (2) The election has effect for that accounting period and all subsequent accounting periods of the company.
- (3) An election under subsection (1) is irrevocable.
##### 431A
- (1) The Treasury may by order amend any of the life assurance provisions of the Corporation Tax Acts where it is expedient to do so in consequence of the exercise of any power under the Financial Services and Markets Act 2000, in so far as that Act relates to insurance companies.
- (2) Where any exercise of a power under that Act has effect for a period ending on or before, or beginning before and ending after, the day on which an order containing an amendment in consequence of that exercise is made under subsection (1) above, the power conferred by that subsection includes power to provide for the amendment to have effect in relation to that period.
- (2A) The Treasury may by order make provision as to the application of the Corporation Tax Acts in relation to insurance special purpose vehicles.
- (2B) An order under subsection (2A) above may in particular contain provision—
- (a) making amendments of any provision of the Corporation Tax Acts, or
- (b) making provision for the life assurance provisions of the Corporation Tax Acts to have effect in relation to any specified description of insurance special purpose vehicles subject to specified modifications or exceptions.
- (2C) An order under subsection (2A) above—
- (a) may make provision having effect in relation to accounting periods current when it is made, and
- (b) if it is made in consequence of, or otherwise in connection with, provision made by any enactment or instrument, may make provision having effect in relation to the same times as that enactment or instrument.
- (3) The Treasury may by order amend any of the following provisions—
- (a) sections 432ZA, 432A, 432B to 432G and 755A . . . ;
- (b) sections 83A, 85, 88 and 89 of the Finance Act 1989;
- (c) section 210A of the Taxation of Chargeable Gains Act 1992.
- (4) An order under subsection (3) above may only be made so as to have effect in relation to periods of account—
- (a) beginning on or after 1st January 2005, and
- (b) ending before 1st October 2006.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) Any power conferred by this section to make an order includes power to make—
- (a) different provision for different cases or different purposes, and
- (b) incidental, supplemental, consequential or transitional provision and savings.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 431AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432A
- (1) Subject to section 432B, this section has effect for determining for the purposes of any provision of the Corporation Tax Acts in relation to any period for which an insurance company carries on business what parts of—
- (a) income or losses arising from the assets of the company’s long-term insurance fund, or
- (b) gains or losses accruing on the disposal of such assets in accordance with the provisions of the 1992 Act,
are referable to any category of business.
- (1ZA) In subsection (1)(a) above “*income*” means—
- (a) income chargeable under Chapter 3 of Part 4 of CTA 2009 (profits of a property business) in respect of any separate UK property businesses treated as carried on by the company under section 432AA,
- (b) income chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of distributions treated by section 548(5) of CTA 2010 as profits of a UK property business carried on by the company,
- (c) income chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of any overseas property business treated as carried on by the company under section 432AA,
- (d) income chargeable under Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies) or Chapter 6 of that Part (sale of foreign dividend coupons),
- (da) income chargeable under Chapter 7 of Part 10 of CTA 2009 (annual payments not otherwise charged) or Chapter 8 of that Part (income not otherwise charged) which arises from a source outside the United Kingdom,
- (e) distributions received by the company from companies resident in the United Kingdom,
- (f) credits in respect of any creditor relationships (within the meaning of Part 5 of CTA 2009) of the company,
- (g) credits in respect of any derivative contracts (within the meaning of Part 7 of CTA 2009) of the company,
- (h) any income of the company chargeable under Chapter 5 of Part 10 of CTA 2009 (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged),
- (i) any credits brought into account by the company under Chapter 2 of Part 8 of CTA 2009 (intangible fixed assets), and
- (j) any income of the company chargeable under any provision to which section 1173 of CTA 2010 (miscellaneous charges) applies, other than profits of the company chargeable under section 436A (gross roll-up business).
- (1ZB) In subsection (1)(a) above “*losses*” means—
- (a) losses in respect of any separate UK property businesses treated as carried on by the company under section 432AA,
- (b) losses in respect of any overseas property businesses treated as carried on by the company under that section,
- (c) debits in respect of any creditor relationships (within the meaning of Part 5 of CTA 2009) of the company,
- (d) debits in respect of any derivative contracts (within the meaning of Part 7 of CTA 2009) of the company,
- (e) any debits brought into account by the company under Chapter 3 of Part 8 of CTA 2009 (intangible fixed assets), and
- (f) any losses of the company computed in the same way as profits chargeable under any provision to which section 1173 of CTA 2010 applies, other than any losses of gross roll-up business.
- (1ZC) For determining as mentioned in subsection (1) above what parts of income or gains arising from the assets of the company's long-term insurance fund are referable to PHI business (to the extent that it would not be the case by virtue of subsections (1ZA) and (1ZB))—
- (a) “income” also includes profits shown in the technical account, and
- (b) “losses” also includes losses so shown.
- (1A) If the company carries on only one category of business in the period—
- (a) all of the income and losses referred to in paragraph (a) of subsection (1) above, and
- (b) all of the gains and losses referred to in paragraph (b) of that subsection,
are referable to that category of business; but if the company carries on more than one category of business in the period, the following provisions shall apply.
- (2) The categories of business referred to in subsections (1) and (1A) above are—
- (a) basic life assurance and general annuity business,
- (b) gross roll-up business, and
- (c) PHI business.
- (3) Income or losses arising from, and gains or losses accruing on the disposal of, assets linked to any category of business is referable to that category of business.
- (3A) Amounts falling within—
- (a) section 442A,
- (b) section 85(2C) of the Finance Act 1989, or
- (c) section 85A of that Act,
are directly referable to basic life assurance and general annuity business.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) Income or losses arising from, and gains or losses accruing on the disposal of, foreign business assets is referable to gross roll-up business.
- (5) There is referable to any category of business . . . the relevant fraction of any income and losses referred to in paragraph (a) of subsection (1) above, and any gains and losses referred to in paragraph (b) of that subsection, not directly referable to any category of business.
- (6) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to basic life assurance and general annuity business, is—
$$AA+B+C$where—A is the aggregate of—(a) the mean of the opening and closing liabilities of the basic life assurance and general annuity business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business,(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and(c) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts;B is the aggregate of—(a) the mean of the opening and closing liabilities of the gross roll-up business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts; andC is the aggregate of—(a) the mean of the opening and closing liabilities of the PHI business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category of business, and(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts.$
- (6A) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to gross roll-up business, is—
$$BA+B+C$where A, B and C have the same meaning as in subsection (6) above.$
- (6B) For the purposes of subsection (5) above “*the relevant fraction*”, in relation to PHI business, is—
$$CA+B+C$where A, B and C have the same meaning as in subsection (6) above.$
- (6C) But if the denominator found in accordance with subsection (6), (6A) or (6B) above is nil, the relevant fraction for the purposes of subsection (5) above in relation to the category of business in question is such fraction as is just and reasonable.
- (7) For the purposes of subsections (5), (6) , (6A) and (6B) above—
- (a) income and losses referred to in paragraph (a) of subsection (1) above, and gains and losses referred to in paragraph (b) of that subsection, are directly referable to a category of business if referable to that category by virtue of subsection (3) or (4A) above, . . . and
- (b) assets are directly referable to a category of business if income and losses arising from the assets, and gains and losses accruing on the disposal of the assets, are so referable by virtue of subsection (3) or (4A) above,. . .
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) In subsection (6) above—
- (a) “*appropriate part*”, in relation to the free assets amount, means—
- (i) where none (or none but an insignificant proportion) of the liabilities of the long-term business are with-profits liabilities, the part of that amount which bears to the whole the proportion A/B where—
A is the amount of the liabilities of the category of business in question (but taking that amount to be nil if it would otherwise be below nil);
B is the whole amount of the liabilities of the long-term business; and
- (ii) in any other case the part of the free assets amount which bears to the whole the proportion C/D where—
C is the amount of the with-profits liabilities of the category of business in question;
D is the whole amount of the with-profits liabilities of the long-term business; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
This is subject to subsection (8ZA) below.
- (8ZA) If for the purposes of subsection (8)(a) above either B or D is nil then, in paragraph (c) of the definition of A and paragraph (b) of the definitions of B and C in subsection (6) above, “*appropriate part*”, in relation to the free assets amount, means the part of that amount which bears to the whole such proportion as is just and reasonable.
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432B
- (1) This section and sections 432C to 432G have effect where it is necessary in accordance with section 83 of the Finance Act 1989 to determine what parts of any items brought into account, within the meaning of that section, are referable to life assurance business or gross roll-up business.
- (2) Where for that purpose reference falls to be made to more than one account recognised for the purposes of that section, the provisions of sections 432C to 432G apply separately in relation to each account.
- (3) Section 432C applies where the business with which an account is concerned (“*the relevant business*”) relates exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus; and sections 432E and 432F apply where the relevant business relates wholly or partly to other policies or contracts (and section 432G applies in either case).
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432C
- (1) This section specifies the extent to which the net amount is referable to life assurance business or to gross roll-up business.
- (2) In this section “*the net amount*” means the aggregate of the amounts brought into account—
- (a) as investment income,
- (b) as an increase in the value of assets, or
- (c) as other income,
less the aggregate of the amounts brought into account as a decrease in the value of assets.
- (3) To the extent that the net amount is attributable to—
- (a) assets linked to life assurance business, or
- (b) foreign business assets,
it is referable to life assurance business.
- (4) There is also referable to life assurance business the appropriate fraction of so much of the net amount as is not attributable to linked assets or foreign business assets.
- (5) For the purposes of subsection (4) above “the appropriate fraction” is—
$$AA+B$where—A is the mean of the opening and closing liabilities of the relevant business so far as referable to life assurance business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the aggregate of the mean of the opening and closing net values of assets linked to the relevant business so far as so referable and foreign business assets; andB is the mean of the opening and closing liabilities of the relevant business so far as referable to PHI business, reduced (but not below nil) by the mean of the opening and closing net values of any assets linked to PHI business.$
- (6) But if the denominator found in accordance with subsection (5) above is nil, the appropriate fraction for the purposes of subsection (4) above is such fraction as is just and reasonable.
- (7) To the extent that the net amount is attributable to—
- (a) assets linked to gross roll-up business, or
- (b) foreign business assets,
it is referable to gross roll-up business.
- (8) There is also referable to gross roll-up business the relevant fraction of so much of the net amount as is not attributable to linked assets or foreign business assets.
- (9) For the purposes of subsection (8) above “the relevant fraction” is—
$$CC+D$where—C is the mean of the opening and closing liabilities of the relevant business so far as referable to gross roll-up business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the aggregate of the mean of the opening and closing net values of any assets linked to gross roll-up business and foreign business assets; andD is the mean of the opening and closing liabilities of the relevant business so far as referable to basic life assurance and general annuity business or PHI business (but taking that mean to be nil if it would otherwise be below nil), reduced (but not below nil) by the mean of the opening and closing net values of any assets linked to either of those categories of business.$
- (10) But if the denominator found in accordance with subsection (9) above is nil, the relevant fraction for the purposes of subsection (8) above is such fraction as is just and reasonable.
- (11) For the purposes of this section, so much of the net amount—
- (a) as is brought into account as other income in an internal linked fund of the company, and
- (b) as is not attributable to assets of that fund,
is to be treated as linked to a category of business to the same extent as income attributable to an asset of the fund would, by virtue of section 432ZA, be referable to that category of business.
##### 432D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432E
- (1) The part of the net amount which is referable to life assurance business or to gross roll-up business is—
- (a) the amount determined in accordance with subsections (2) and (2A) below, or
- (b) if greater, the amount determined in accordance with subsection (3) below.
- (1A) In this section “*the net amount*” means the aggregate of the amounts brought into account—
- (a) as investment income,
- (b) as an increase in the value of assets, or
- (c) as other income,
less the aggregate of the amounts brought into account as a decrease in the value of assets.
- (2) For the purposes of subsection (1) above there shall be determined the amount which is such as to secure—
- (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) . . . that
$$CS-CAS=(S-AS)×CASAS$where—S is the surplus of the relevant business;AS is so much of that surplus as is allocated to persons entitled to the benefits provided for by the policies or contracts to which the relevant business relates;CAS is so much of the surplus so allocated as is attributable to policies or contracts of life assurance business or of gross roll-up business; andCS is so much of the surplus of the relevant business as would remain if the relevant business were confined to life assurance business or to gross roll-up business.$
- (2A) In a case where an amount or amounts are taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of subsection (2B) of that section or by virtue of section . . . 444AB, . . . 444AEA,444AECA, 444AF(2) or 444AK(2) of this Act, the amount determined under subsection (2) above is increased by—
$$CASAS×RP$where—CAS and AS have the same meanings as in subsection (2) above; andRP is the amount or the aggregate of the amounts taken into account under subsection (2) of section 83 of the Finance Act 1989 by virtue of any of the following provisions—subsection (2B) of that section;section 444AB . . . of this Act;section 444AEA or 444AECA of this Act;. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .subsection (2) of section 444AF of this Act (and see subsections (5) and (6) of that section);subsection (2) of section 444AK of this Act (but only for the purposes mentioned in subsection (3) of that section).$
- (3) For the purposes of subsection (1) above there shall also be determined the aggregate of—
- (a) the applicable percentage of what is left of the mean of the opening and closing liabilities of the relevant business so far as referable to the category of business concerned (but taking that mean to be nil if it would otherwise be below nil) after deducting from it the mean of the opening and closing values of any assets of the relevant business linked to that category of business . . . , and
- (b) the part of the net amount . . . that is attributable to assets linked to that category of business . . . .
- (4) Subject to subsection (4A) below, for the purposes of subsection (3) above “*the applicable percentage*”, in any case, is—
$$AB×100$where—A is so much of the net amount as is brought into account in respect of the relevant business less such part of it as is attributable to linked assets . . . ; andB is the mean of the opening and closing liabilities of the relevant business reduced by the mean of the opening and closing values of any assets of the relevant business which are linked assets . . . .$
- (4A) If the mean of the opening and closing liabilities of the relevant business reduced by the opening and closing values of any assets of the relevant business which are linked assets . . . is nil then, for the purposes of subsection (3) above, “*the applicable percentage*” is such percentage as is just and reasonable.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfers of other business
#### Transfers of other business
##### 434A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) Where for any accounting period the loss arising to an insurance company from its life assurance business falls to be computed in accordance with the life assurance trade profits provisions—
- (a) the loss resulting from the computation shall be reduced (but not below nil) by . . . —
- (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (ii) any relevant non-trading deficit for that period on the company’s debtor relationships; and
- (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (b) if the whole or any part of that loss as so reduced is set off—
- (i) under section 37 of CTA 2010, or
- (ii) under Chapter 4 of Part 5 of CTA 2010,
any loss for that period under section 436A shall be reduced (but not below nil) by the total of the amounts set off as mentioned in sub-paragraphs (i) and (ii) above.
- (2A) The reference in subsection (2)(a)(ii) above to a relevant non-trading deficit for any period on a company’s debtor relationships is a reference to the non-trading deficit on the company’s loan relationships . . . for the company’s basic life assurance and general annuity business if credits and debits given in respect of the company’s creditor relationships (within the meaning of Part 5 of CTA 2009) were disregarded.
- (3) In the case of a company carrying on life assurance business, no relief shall be allowable —
- (a) under Chapter 2, 4 or 6 of Part 4 of CTA 2010 (loss relief) or under Part 5 (group relief) of that Act,
- (aa) (where the company's life assurance business is not mutual business) in respect of any qualifying charitable donation, or
- (b) in respect of any amount representing a non-trading deficit on the company’s loan relationships that has been computed otherwise than by reference to debits and credits referable to that business,
against the policy holders’ share of the relevant profits for any accounting period.
- For the purposes of this subsection “*the policy holders’ share of the relevant profits*” has the same meaning as in section 89 of the Finance Act 1989.
- (4) For the purposes of section 105 of CTA 2010, where the surrendering company is an insurance company which is charged to tax under the I minus E basis in respect of its life assurance business for the surrender period, the company's gross profits of that period do not include its relevant profits (within the meaning of section 88 of the Finance Act 1989) for that period; and expressions used in this subsection and section 105 of CTA 2010 have the same meaning here as there.
#### Income arising under settlement where settlor retains an interest.
##### 438A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Cancellation of corporation tax advantage.
##### 440A
- (1) Subsection (2) below applies where the assets of an insurance company include securities of a class all of which would apart from this section be regarded for the purposes of corporation tax on chargeable gains as one holding.
- (2) Where this subsection applies—
- (a) so many of the securities as are identified in the company’s records as securities by reference to the value of which there are to be determined benefits provided for under policies or contracts the effecting of all (or all but an insignificant proportion) of which constitutes the carrying on of—
- (i) basic life assurance and general annuity business, or
- (ii) gross roll-up business,
shall be treated for the purposes of corporation tax as a separate holding linked solely to that business,
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) so many of the securities as are included in the company’s long-term insurance fund but do not fall within paragraph (a) shall be treated for those purposes as a separate holding which is an asset of that fund (but not of the description mentioned in that paragraph), and
- (e) any remaining securities shall be treated for those purposes as a separate holding which is not of any of the descriptions mentioned in the preceding paragraphs.
- (3) Subsection (2) above also applies where the assets of an insurance company include securities of a class and apart from this section some of them would be regarded as a 1982 holding, and the rest as a section 104 holding, for the purposes of corporation tax on chargeable gains.
- (4) In a case within subsection (3) above—
- (a) the reference in any paragraph of subsection (2) above to a separate holding shall be construed, where necessary, as a reference to a separate 1982 holding and a separate section 104 holding, and
- (b) the questions whether such a construction is necessary in the case of any paragraph and, if it is, how many securities falling within the paragraph constitute each of the two holdings shall be determined in accordance with paragraph 12 of Schedule 6 to the Finance Act 1990 and the identification rules applying on any subsequent acquisitions and disposals.
- (5) Section 105 of the 1992 Act shall have effect where subsection (2) above applies as if securities regarded as included in different holdings by virtue of that subsection were securities of different kinds.
- (6) In this section—
- “*1982 holding*” has the same meaning as in section 109 of the 1992 Act;
- “*section 104 holding*” has the same meaning as in section 104(3) of that Act; and
- “*securities*” means shares, or securities of a company, and any other assets where they are of a nature to be dealt in without identifying the particular assets disposed or acquired.
- (7) In a case where the profits of a company’s life assurance business are charged to tax under section 35 of CTA 2009 (charge on trade profits) this section has effect with the modification specified in section 440B(4).
##### 441A
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444A
- (1) . . . This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“the transferor”) to another (“the transferee”).
- (2) Any expenses payable which (making the assumptions in subsection (3B) below) would have fallen to be brought into account by the transferor in determining the deduction for expenses payable to be allowed under section 76 in computing profits for an accounting period following the period which ends with the day on which the transfer takes place shall, instead, be brought into account under and in accordance with that section by the transferee as expenses payable by him (and giving effect in the case of acquisition expenses, to section 86(6) to (9) of the Finance Act 1989).
- (3) Any loss which (making the assumptions in subsection (3B) below)—
- (a) would have been available under section 436A(4) to be set off against profits of the transferor for the accounting period following that which ends with the day on which transfer takes place, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
shall, instead, be treated as a loss of the transferee (and available to be set off against profits of gross roll-up business)if the conditions mentioned in subsection (3YA) are satisfied in relation to the business transferred.
- (3YA) The conditions are—
- (a) the ownership condition set out in section 941 of CTA 2010, and
- (b) the tax condition set out in section 943 of that Act.
- (3ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3A) Any subsection (2) excess (within the meaning of section 432F(2)) which (making the assumptions in subsection (3B) below) would have been available under section 432F(3) or (4) to reduce a subsection (3) figure (within the meaning of section 432F(1)) of the transferor in an accounting period following that which ends with the day on which transfer takes place—
- (a) shall, instead, be treated as a subsection (2) excess of the transferee, and
- (b) shall be taken into account in the first accounting period of the transferee ending after the date of the transfer (to reduce the subsection (3) figure or, as the case may be, to produce or increase a subsection (2) excess for that period),
in relation to the revenue account of the transferee dealing with or including the business transferred.
- (3B) The assumptions referred to in subsections (2), (3) and (3A) above are—
- (a) that the transferor had continued to carry on the business transferred after the transfer, and
- (b) where there is no accounting period of the transferor ending with the transfer date, that there was such an accounting period.
- (4) Where acquisition expenses are treated as expenses payable by the transferee by virtue of subsection (2) above, the amount deductible for the first accounting period of the transferee ending after the transfer takes place shall be calculated as if that accounting period began with the day after the transfer.
- (5) Where the transfer is of part only of the transferor’s long-term business, subsection (2), (3) or (3A) above shall apply only to such part of any amount to which it would otherwise apply as is appropriate.
- (6) Any question arising as to the operation of subsection (5) above shall be determined in the same manner as an appeal, and both the transferor and transferee shall be entitled to be a party to any proceedings.
- (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Classes of life assurance business
##### 431B
- (1) In this Chapter “*pension business*” means so much of a company’s life assurance business as is referable to contracts entered into for the purposes of a registered pension scheme or is the reinsurance of such business.
- (2) Where a pension scheme ceases to be a registered pension scheme by virtue of the withdrawal of registration of the pension scheme under section 157 of the Finance Act 2004, any of the company’s life assurance business that was pension business when the pension scheme was a registered pension scheme is to be treated as ceasing to be pension business at the beginning of the period of account of the company in which the pension scheme so ceases to be a registered pension scheme.
- (3) Where—
- (a) immediately before 6th April 2006 an annuity contract falls within any of the descriptions of contracts specified in subsection (2) of this section as it had effect immediately before that date, but
- (b) on or after that date the contract does not fall to be regarded for the purposes of this section as having been entered into for the purposes of a registered pension scheme,
the contract is to be treated for the purposes of this section as having been entered into for such purposes.
##### 431BA
- (1) In this Chapter “*child trust fund business*” means so much of a company's life assurance business as is referable to child trust fund policies (but not including the reinsurance of such business).
- (2) In this section “*child trust fund policy*” means a policy of life insurance which is an investment under a child trust fund (within the meaning of the Child Trust Funds Act 2004).
##### 431BB
- (1) In this Chapter “*individual savings account business*” means so much of a company's life assurance business as is referable to individual savings account policies (but not including the reinsurance of such business).
- (2) In this section “*individual savings account policy*” means a policy of life insurance which is an investment of a kind specified in regulations made by virtue of section 695(1) of ITTOIA 2005.
##### 431C
- (1) In this Chapter “*life reinsurance business*” means reinsurance of life assurance business other than pension business or business of any description excluded from this section by regulations made by the Board.
- (2) Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.
##### 431D
- (1) In this Chapter “*overseas life assurance business*” means so much of a company's relevant life assurance business as is with a policy holder or annuitant not residing in the United Kingdom (but not including the reinsurance of such business).
- (1A) In subsection (1) above “*relevant life assurance business*” means life assurance business other than—
- (a) pension business
- (b) individual savings account business,
- (c) child trust fund business, and
- (d) business of any description prescribed by regulations made by the Commissioners for Her Majesty's Revenue and Customs.
- (2) Regulations under subsection (1A) above may describe the excluded business by reference to any circumstances appearing to the Commissioners to be relevant.
- (3) The Commissioners for Her Majesty's Revenue and Customs may by regulations—
- (a) make provision as to the circumstances in which a trustee who is a policy holder or annuitant residing in the United Kingdom is to be treated for the purposes of this section as not so residing; and
- (b) provide that nothing in Chapter II of Part XIII or Chapter 9 of Part 4 of ITTOIA 2005 shall apply to a policy or contract which constitutes overseas life assurance business by virtue of any such provision as is mentioned in paragraph (a) above.
- (4) Regulations under subsection (1A) or (3) above may contain such supplementary, incidental, consequential or transitional provision as appears to the Commissioners to be appropriate (including provision amending any enactment or any instrument made under an enactment).
##### 431E
- (1) The Board may by regulations make provision for giving effect to section 431D.
- (2) Such regulations may, in particular—
- (a) provide that, in such circumstances as may be prescribed, any prescribed issue as to whether business is or is not overseas life assurance business (or overseas life assurance business of a particular kind) shall be determined by reference to such matters (including the giving of certificates or undertakings, the giving or possession of information or the making of declarations) as may be prescribed,
- (b) require companies to obtain certificates, undertakings, information or declarations from policy holders or annuitants, or from trustees or other companies, for the purposes of the regulations,
- (c) make provision for dealing with cases where any issue such as is mentioned in paragraph (a) above is (for any reason) wrongly determined, including provision allowing for the imposition of charges to tax (with or without limits on time) on the insurance company concerned or on the policy holders or annuitants concerned,
- (d) require companies to supply information and make available books, documents and other records for inspection on behalf of the Board, and
- (e) make provision (including provision imposing penalties) for contravention of, or non-compliance with, the regulations.
- (3) The regulations may—
- (a) make different provision for different cases, and
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 431EA
In this Chapter “*gross roll-up business*” means business of any of the following kinds—
- (a) pension business;
- (b) child trust fund business;
- (c) individual savings account business;
- (d) life reinsurance business; and
- (e) overseas life assurance business.
##### 431F
In this Chapter “*basic life assurance and general annuity business*” means life assurance business other than gross roll-up business.
### Basis of taxation etc
##### 431G
- (1) This section applies in relation to an insurance company which carries on life assurance business (whether or not it also carries on insurance business of any other kind).
- (2) Subject as follows, the profits of the life assurance business for any accounting period shall be charged to tax under the I minus E basis.
- (3) Where in the case of an insurance company for an accounting period either—
- (a) all of its life assurance business is reinsurance business and none of that business is of a type excluded from this subsection by regulations made by the Board, or
- (b) all, or substantially all, of its life assurance business is gross roll-up business,
the profits of that business for the accounting period shall be charged to tax under section 35 of CTA 2009 (charge on trade profits) and not otherwise.
- (4) Where—
- (a) the profits of the life assurance business of an insurance company for any accounting period are charged to tax under the I minus E basis, and
- (b) had those profits been charged to tax under section 35 of CTA 2009, a loss would have arisen to the company from that business for the period,
the loss (after being reduced in accordance with section 434A(2)(a)) may be relieved under section 37 of CTA 2010 or under Chapter 4 of Part 5 of that Act.
- (5) The application, in relation to the life assurance business of an insurance company, of any of the life assurance trade profits provisions is not to be taken—
- (a) to prevent the application of the I minus E basis in relation to that business of the company for any accounting period, or
- (b) to affect the operation of the I minus E basis in relation to the that business of the company for any accounting period except as specifically provided by the Corporation Tax Acts.
##### 431H
- (1) This section applies in relation to an insurance company which carries on life assurance business and insurance business of any other kind.
- (2) For the purposes of the Corporation Tax Acts—
- (a) the life assurance business, and
- (b) the other insurance business,
are to be treated as separate businesses.
- (3) The profits of the other insurance business shall be charged to tax under section 35 of CTA 2009 (charge on trade profits) as the profits of a separate trade.
- (4) But subsection (3) above does not apply where that business is mutual business.
- (5) As to the profits of the life assurance business, see section 431G.
##### 432YA
- (1) This section applies in the case of—
- (a) a company which is a non-profit company, or
- (b) the non-profit fund of a company which is not a non-profit company,
if an amount (“*the relevant amount*”) is shown in paragraph 4(12) of Appendix 9.4 to the periodical return for the company for a period of account which ends on or after 31st December 2006 but before 1st January 2009 (a “relevant period of account”).
- (2) In computing profits of PHI business in accordance with the provisions applicable for the purposes of section 35 of CTA 2009 (charge on trade profits)—
- (a) X shall be added to the closing long term business provision of the company for the relevant period of account; and
- (b) XA shall be brought into account as a trading receipt of the company for each subsequent period of account until the total sum of the amounts so bought into account is equal to X (and if that total sum would otherwise exceed X, the excess shall be ignored).
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2B) X is—
- (a) where the relevant period of account ends before 1st April 2007, the whole of the relevant amount;
- (b) where the relevant period of account ends on or after 1st April 2007 but before 1st January 2008, two-thirds of the relevant amount;
- (c) where the relevant period of account ends on or after 1st January 2008, one-third of the relevant amount.
- (2C) XA is the amount found by applying the following formula—
$$Y12×Z$Here—Y is the number of months of the period of account in question (part of a month being counted as a month); andZ is—(a) where X is the whole of the relevant amount, one-third of X;(b) where X is two thirds of the relevant amount, one-half of X;(c) where X is one third of the relevant amount, the whole of X.$
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) In this section—
- “*long term business provision*” has the same meaning as in Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) This section is subject to sections 82E and 82F of the Finance Act 1989 (treatment of transferors and transferees under insurance business transfer schemes) and those sections shall apply in relation to this section as if—
- (a) any reference in them to a provision of section 82D of that Act (treatment of profits: life assurance – adjustment consequent on change in Insurance Prudential Sourcebook) were a reference to the corresponding provision of this section,
- (b) the reference in section 82E(4) to life assurance business were a reference to PHI business, and
- (c) the reference in section 82E(7) to the life assurance trade profits provisions were a reference to the provisions applicable for the purposes of section 35 of CTA 2009.
##### 432ZA
- (1) In this Chapter “*linked assets*” means assets of an insurance company which are identified in its records as assets by reference to the value of which benefits provided for under a policy or contract are to be determined and in a case where only part of an asset is so identified, references to a linked asset are references to that part.
- (2) Linked assets shall be taken—
- (a) to be linked to long-term business of a particular category if the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category; and
- (b) to be linked solely to long-term business of a particular category if all (or all but an insignificant proportion) of the policies or contracts providing for the benefits concerned are policies or contracts the effecting of which constitutes the carrying on of business of that category.
- (3) Where an asset is linked to more than one category of long-term business, a part of the asset shall be taken to be linked to each category; and references in this Chapter to assets linked (but not solely linked) to any category of business shall be construed accordingly.
- (4) Where subsection (3) above applies, the part of the asset linked to any category of business shall be a proportion determined as follows—
- (a) where in the records of the company values are shown for the asset in funds referable to particular categories of business, the proportion shall be determined by reference to those values;
- (b) in any other case the proportion shall be equal to the proportion A/B where—
A is the total of the linked liabilities of the company which are liabilities of the internal linked fund in which the asset is held and are referable to that category of business;
B is the total of the linked liabilities of the company which are liabilities of that fund.
- (5) For the purposes of sections 432A to 432E—
- (a) income arising in any period from assets linked but not solely linked to a category of business,
- (b) gains arising in any period from the disposal of such assets, and
- (c) increases and decreases in the value of such assets,
shall be treated as arising to that category of business in the proportion which is the mean of the proportions determined under subsection (4) above at the beginning and end of the period.
- (6) In this section—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “*linked liabilities*” means liabilities in respect of benefits to be determined by reference to the value of linked assets.
- (7) In the case of a policy or contract the effecting of which constitutes a class of life assurance business the fact that it also constitutes PHI business shall be disregarded for the purposes of this section unless the benefits to be provided which constitute PHI business are to be determined by reference to the value of assets.
##### 432AA
- (1) An insurance company is treated (despite sections 205 and 206 of CTA 2009) as carrying on separate UK property businesses or overseas property businesses, in accordance with the following rules.
- (2) The exploitation of land held as an asset of the company’s long-term insurance fund is treated as a separate business from the exploitation of land not so held.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The exploitation of land held as an asset linked to any of the following categories of business is regarded as a separate business—
- (a) basic life assurance and general annuity business;
- (b) gross roll-up business; and
- (c) PHI business.
- (5) Accordingly, the exploitation of land held as an asset of the company’s long-term insurance fund otherwise than as mentioned in subsection . . . (4) is treated as a separate business from any other.
- (6) In this section “*land*” means any estate, interest or rights in or over land.
##### 432AB
- (1) This section applies to any loss arising in a UK property business or overseas property business.
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) So far as a loss is referable to basic life assurance and general annuity business, it shall be treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section.
- (4) Where a company is treated under section 432AA as carrying on—
- (a) more than one UK property business, or
- (b) more than one overseas property business,
then, in relation to either kind of business, the reference in subsection (3) above to a loss referable to basic life assurance and general annuity business shall be construed as a reference to any aggregate net loss after setting the losses from those businesses which are so referable against any profits from those businesses that are so referable.
- (5) The provisions of Chapter 4 of Part 4 of CTA 2010 (loss relief: property losses) do not apply to a loss referable to life assurance business or any category of life assurance business.
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 432CA
- (1) This section applies where—
- (a) an insurance company is not a non-profit company in relation to a period of account (“the current period of account”),
- (b) in the case of any business with which an account of the company for the current period of account is concerned (“the relevant business”), an amount is a relevant brought into account amount for that period of account (see subsection (2)),
- (c) section 432C applies for determining the extent to which the relevant brought into account amount is referable to life assurance business or to gross roll-up business, and
- (d) the line 51 reduction condition is met (see subsection (3)).
- (2) An amount is a relevant brought into account amount for a period of account if—
- (a) it is brought into account as mentioned in subsection (2)(b) of section 83 of the Finance Act 1989 (increases in value of non-linked assets) for that period,
- (b) it is deemed to be brought into account for that period by subsection (2B) of that section in consequence of the transfer of non-linked assets, or
- (c) it is taken into account under subsection (2) of that section for that period by virtue of section 444AB as being the relevant amount in relation to non-linked assets.
- (3) The line 51 reduction condition is met if—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for the current period of account, is less than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant reduction”.
- (4) Section 432C applies in relation to so much of the relevant brought into account amount as does not exceed the relevant reduction (“the affected amount”) as if it were brought into account as an increase in the value of assets in the case of the relevant business for the applicable appropriate period of account of the company.
- (5) A period of account is an “appropriate period of account” if it ended before the current period of account and—
- (a) the amount shown in column 1 of line 51 of Form 14 of the company's periodical return in respect of the relevant business for it, was more than
- (b) the amount so shown for the period of account immediately before it;
and the amount of the difference is “the relevant increase.”
- (6) The “applicable” appropriate period of account is the one which ended most recently (“the most recent appropriate period of account”).
- (7) But if the relevant increase in the case of the most recent appropriate period of account is less than the affected amount, the most recent appropriate period of account is the applicable appropriate period of account in relation to only so much of the affected amount as does not exceed that relevant increase.
- (8) In that case, the appropriate period of account which ended most recently before the most recent appropriate period of account is the applicable appropriate period of account in relation to so much of the remainder as does not exceed the relevant increase in the case of that appropriate period of account (and, where necessary, so on until the applicable appropriate period of account is established in relation to all of the affected amount or there are no more appropriate periods of account).
- (9) If the current period of account is not the first in relation to which this section has applied in the case of the business concerned, the amount of the relevant increase in the case of any appropriate period of account (“*the period in question*”) is to be treated as reduced by the relevant aggregate.
- (10) The “relevant aggregate” is the aggregate of so much of the affected amount for any period or periods of account earlier than the current period of account as was an amount to which section 432C applied as if it were brought into account as mentioned in subsection (4) for the period in question.
- (11) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
##### 432CB
- (1) This section applies where, under an insurance business transfer scheme, there is a transfer of long-term business—
- (a) from a non-profit fund of an insurance company (“*the transferor*”) which is not a non-profit company in relation to the relevant period of account,
- (b) to another insurance company (“*the transferee*”) to constitute or form part of a non-profit fund of the transferee (“*the transferee's non-profit fund*”),
(“*the transfer*”) and conditions A and B are met.
- (2) Condition A is that the fair value of the assets transferred by the transfer exceeds by an amount (“the chargeable excess”) the amount of the relevant liabilities transferred by the transfer.
For this purpose “relevant” liabilities are liabilities of a type shown (or treated as shown) in any of lines 14, 17, 21 to 23 and 31 to 38 of Form 14 of a periodical return of an insurance company.
- (3) Condition B is that the main purpose, or one of the main purposes, of the transferor or the transferee (or both) in entering into any part of the transfer scheme arrangements is to secure a reduction in tax as a result of section 432C having effect in the case of the transferee, rather than the transferor, in relation to the business transferred by the transfer.
- (4) The chargeable excess is to be brought into account by the transferor as mentioned in section 83(2)(b) of the Finance Act 1989 for the relevant period of account.
- (5) Where there is no amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first period of account of the transferee ending on or after the transfer date (“the first post-transfer period of account”), the chargeable excess is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the first post-transfer period of account.
- (6) Where—
- (a) there is an amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the first post-transfer period of account, and
- (b) the amount so shown in column 1 of line 51 of Form 14 of the periodical return of the transferee for that period of account, or for any other period of account of the transferee ending after the transfer date, (an “affected period of account”) is less than the total chargeable excess amount,
the relevant amount is to be brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for the affected period of account.
- (7) For this purpose “the relevant amount” is the amount by which—
- (a) the amount shown in relation to the transferee's non-profit fund in column 1 of line 51 of Form 14 of the periodical return of the transferee for the affected period of account, is less than
- (b) the total chargeable excess amount less any amount brought into account by the transferee as mentioned in section 83(2) of the Finance Act 1989 as a decrease in the value of non-linked assets for any earlier period of account by virtue of the operation of this section in relation to the transferee's non-profit fund.
- (8) In subsections (6) and (7) “*the total chargeable excess amount*” means the aggregate of—
- (a) the chargeable excess, and
- (b) any amount which is the chargeable excess in relation to any other transfer of business to the transferee's non-profit fund.
- (9) In this section “*the relevant period of account*” means—
- (a) the period of account of the transferor ending immediately before the transfer date, or
- (b) if no period of account of the transferor so ends, the period of account of the transferor covering the transfer date.
- (10) In this section “*the transfer scheme arrangements*” means the insurance business transfer scheme and any relevant associated operations; and for this purpose “*relevant associated operations*” means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance, or
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee,
which is effected in connection with the insurance business transfer scheme.
- (11) In subsection (10)—
- “dependant”, and
- “insurance undertaking”,
have the same meaning as in the Insurance Prudential Sourcebook.
- (12) In this section “*the transfer date*” means the date on which the insurance business transfer scheme takes effect.
- (13) For the purposes of this section an insurance company which has elected under section 83YA(9) of the Finance Act 1989 (changes in value of assets brought into account: non-profit companies) to be treated as a non-profit company in relation to a period of account is to be regarded as a non-profit company in relation to the period of account.
#### Stock lending.
##### 432F
- (1) The provisions of this section provide for the reduction of the amount determined in accordance with section 432E(3) (“the subsection (3) figure”) for an accounting period in which that amount exceeds, or would otherwise exceed, the amount determined in accordance with section 432E(2) (“the subsection (2) figure”).
- (2) . . . There shall be determined for each accounting period the amount (if any) by which the subsection (2) figure . . . exceeds the subsection (3) figure (“the subsection (2) excess”).
- (3) Where there is a subsection (2) excess, the amount shall be carried forward and if in any subsequent accounting period the subsection (3) figure exceeds, or would otherwise exceed, the subsection (2) figure, it shall be reduced by the amount or cumulative amount of subsection (2) excesses so far as not previously used under this subsection.
- (4) Where in an accounting period that amount is greater than is required to bring the subsection (3) figure down to the subsection (2) figure, the balance shall be carried forward and aggregated with any subsequent subsection (2) excess for use in subsequent accounting periods.
##### 432G
- (1) There is referable to the life assurance business of the transferee the appropriate fraction of the amount brought into account as a business transfer-in and of any amount taken into account as profits under section 444ABD(1).
- (2) For the purposes of subsection (1) above “the appropriate fraction” is—
$$LABLTL$where—LABL is the amount of the liabilities transferred that are referable to the life assurance business (but is nil if it would otherwise be below nil); andTL is the whole of the liabilities transferred.$
- (3) But if the amount of the liabilities transferred is nil, the appropriate fraction for the purposes of subsection (1) above is such fraction as is just and reasonable.
- (4) There is referable to the gross roll-up business of the transferee the relevant fraction of the amount brought into account as a business transfer-in and of any amount taken into account as profits under section 444ABD(1).
- (5) For the purposes of subsection (4) above “the relevant fraction” is—
$$GRBLTL$where—GRBL is the amount of the liabilities transferred that are referable to the gross roll-up business (but is nil if it would otherwise be below nil); andTL has the same meaning as in subsection (2) above.$
- (6) But if the amount of the liabilities transferred is nil, the relevant fraction for the purposes of subsection (4) above is such fraction as is just and reasonable.
### Miscellaneous provisions relating to life assurance business
##### 434AZA
- (1) Where this section applies in the case of a company carrying on life assurance business, relief allowable under section 37 of CTA 2010, or under Part 5 of that Act, in respect of losses incurred by the company in the life assurance business in an accounting period is reduced in accordance with section 434AZB.
- (2) This section applies in the case of a company where—
- (a) there has been a relevant addition to one or more non-profit funds in a period of account ending no later than the accounting period (“the relevant period of account”) (see subsection (3)),
- (b) the company is not a non-profit company in relation to the relevant period of account and has not elected under subsection (9) of section 83YA of the Finance Act 1989 to be treated for the purposes of that section as if it were, and
- (c) condition A or B is met,
and, if the relevant period of account is not the period of account ending with the accounting period (“the current period of account”), condition C is also met.
- (3) For the purposes of subsection (2), there is a relevant addition to a non-profit fund in the relevant period of account if an amount is shown as a transfer from non-technical account in line 32 of the Form 58 of the non-profit fund in the periodical return for that period of account.
- (4) Condition A is that there is a relevant book value election in relation to assets of a non-profit fund of the company.
- (5) For the purposes of subsection (4), there is a relevant book value election in relation to assets of a non-profit fund if an amount is shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account.
- (6) Condition B is that the company is party to arrangements the main purpose, or one of the main purposes, of which is to reduce the relevant admissible value of assets of a non-profit fund of the company, other than any structural assets.
- (7) For the purposes of subsection (6) (and section 434AZB), the “*relevant admissible value*” means the value reflected in line 89 of Form 13 of the periodical return for the current period of account.
- (8) Condition C is that the surplus arising since the last valuation shown in line 34 of the Form 58 of the non-profit fund, or any of the non-profit funds, in relation to which condition A or B is met in the periodical return for the current period of account is a negative amount.
#### Imputation of chargeable profits and creditable tax of controlled foreign companies
##### 434AZB
- (1) The amount of the relief allowable as mentioned in section 434AZA(1) is reduced by whichever of the following is the least—
- (a) the amount of the loss,
- (b) the amount specified in subsection (2), and
- (c) the amount specified in subsection (4).
- (2) The amount mentioned in subsection (1)(b) is—
- (a) where only condition A in section 434AZA is met, the relevant amount relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant amounts relating to them,
- (b) where only condition B is met, the amount of the relevant reduction relating to the non-profit fund in relation to which it is met or (where it is met in relation to more than one non-profit fund) the sum of the relevant reductions relating to them, and
- (c) where both condition A and condition B are met, the aggregate of the amounts in paragraphs (a) and (b).
- (3) In subsection (2)—
- (a) “*relevant amount*”, in relation to a non-profit fund, means the amount shown in relation to the non-profit fund as the excess of the value of net admissible assets in line 51 of the Form 14 of the non-profit fund in the periodical return for the current period of account (as reduced by any amount which has had effect to reduce relief for losses for a previous accounting period), and
- (b) “*relevant reduction*”, in relation to a non-profit fund, means the reduction of the relevant admissible value of assets of the non-profit fund (other than structural assets) which is attributable to the arrangements (as so reduced).
- (4) The amount mentioned in subsection (1)(c) is—
- (a) if the relevant period of account is the current period of account, the amount referred to in section 434AZA(3) in the case of the non-profit fund, or of each of the non-profit funds, to which there has been a relevant addition in the relevant period of account, and
- (b) otherwise, so much of the amount shown in line 31 of the Form 58 of the non-profit fund or non-profit funds in the periodical return for the current period of account as is attributable to the amount so referred to.
##### 434AZC
- (1) For the purposes of sections 434AZA and 434AZB, a non-profit fund required to support a with-profits fund is to be treated as not being a non-profit fund.
- (2) Sections 434AZA and 434AZB apply to a non-profit part of a with-profits fund as if references to something shown in the Form 14 or Form 58 of the non-profit fund in a periodical return were to what would be so shown if there were a Form 14 or Form 58 of the non-profit part of the with-profits fund in the periodical return.
- (3) In sections 434AZA and 434AZB—
- “*arrangements*” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
- “*structural assets*” has the same meaning as in section 83XA of the Finance Act 1989 (see subsection (3) of that section and any regulations made under it).
##### 434B
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 434E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 436A
- (1) The charge to corporation tax on income applies to profits arising to an insurance company from gross roll-up business.
- (2) For that purpose—
- (a) the gross roll-up business is to be treated separately, and
- (b) the profits from it are to be computed in accordance with the life assurance trade profits provisions.
- (3) In making that computation, sections 82 and 82B to 83AB 83ZA of the Finance Act 1989 apply with the necessary modifications.
- (4) If in any accounting period an insurance company incurs a loss, to be computed on the same basis as the profits, arising from its gross roll-up business—
- (a) the loss must be set off against the amount of any profits chargeable under this section for any subsequent accounting period, and
- (b) accordingly, the amount of the company's profits so charged in any such accounting period is to be treated as reduced by the amount of the loss or so much of that amount as cannot be relieved under this section against profits of an earlier accounting period.
- (5) Section 91 of CTA 2010 does not apply to a loss incurred by an insurance company on its gross roll-up business.
- (6) No loss to which section 91 of CTA 2010 applies may be set off . . . against the amount of any profits chargeable under this section.
- (7) This section does not apply in relation to an insurance company for an accounting period if the profits of its long-term business for the accounting period are charged to tax under section 35 of CTA 2009 (charge on trade profits).
##### 436B
- (1) Gains referable to gross roll-up business are not chargeable gains.
- (2) For the purposes of this section “*gains referable to gross roll-up business*” means gains which—
- (a) accrue to an insurance company on the disposal by it of assets of its long-term insurance fund, and
- (b) are referable (in accordance with section 432A) to gross roll-up business.
##### 437A
- (1) For the purposes of section 437 an annuity is a steep-reduction annuity if—
- (a) the amount of any payment in respect of the annuity (but not the term of the annuity) depends on any contingency other than the duration of a human life or lives;
- (b) the annuitant is entitled in respect of the annuity to payments of different amounts at different times; and
- (c) those payments include a payment (“*a reduced payment*”) of an amount which is substantially smaller than the amount of at least one of the earlier payments in respect of that annuity to which the annuitant is entitled.
- (2) Where there are different intervals between payments to which an annuitant is entitled in respect of any annuity, the question whether or not the conditions in subsection (1)(b) and (c) above are satisfied in the case of that annuity shall be determined by assuming—
- (a) that the annuitant’s entitlement, after the first payment, to payments in respect of that annuity is an entitlement to payments at yearly intervals on the anniversary of the first payment; and
- (b) that the amount to which the annuitant is assumed to be entitled on each such anniversary is equal to the annuitant’s assumed entitlement for the year ending with that anniversary.
- (3) For the purposes of subsection (2) above an annuitant’s assumed entitlement for any year shall be determined as follows—
- (a) the annuitant’s entitlement to each payment in respect of the annuity shall be taken to accrue at a constant rate during the interval between the previous payment and that payment; and
- (b) his assumed entitlement for any year shall be taken to be equal to the aggregate of the amounts which, in accordance with paragraph (a) above, are treated as accruing in that year.
- (4) In the case of an annuity to which subsection (2) above applies, the reference in section 437(1CB)(a) to the making of a reduced payment shall be construed as if it were a reference to the making of a payment in respect of that annuity which (applying subsection (3)(a) above) is taken to accrue at a rate that is substantially less than the rate at which at least one of the earlier payments in respect of that annuity is taken to accrue.
- (5) Where—
- (a) any question arises for the purposes of this section whether the amount of any payment in respect of any annuity—
- (i) is substantially smaller than the amount of, or
- (ii) accrues at a rate substantially less than,
an earlier payment in respect of that annuity, and
- (b) the annuitant or, as the case may be, every annuitant is an individual who is beneficially entitled to all the rights conferred on him as such an annuitant,
that question shall be determined without regard to so much of the difference between the amounts or rates as is referable to a reduction falling to be made as a result of the occurrence of a death.
- (6) Where the amount of any one or more of the payments to which an annuitant is entitled in respect of an annuity depends on any contingency, his entitlement to payments in respect of that annuity shall be determined for the purposes of section 437(1CA) to (1CC) and this section according to whatever (applying any relevant actuarial principles) is the most likely outcome in relation to that contingency.
- (7) Where any agreement or arrangement has effect for varying the rights of an annuitant in relation to a payment in respect of any annuity, that payment shall be taken, for the purposes of section 437(1CA) to (1CC) and this section, to be a payment of the amount to which the annuitant is entitled in accordance with that agreement or arrangement.
- (8) References in this section to a contingency include references to a contingency that consists wholly or partly in the exercise by any person of any option.
##### 438B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 438C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 439A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 439B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 440B
- (1) The following provisions apply where the profits of a company’s life assurance business are charged to tax under section 35 of CTA 2009 (charge on trade profits)in accordance with section 431G(3).
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Subsection (1) of section 440 applies as if the only categories set out in subsection (4) of that section were—
- (a) assets of the long-term insurance fund, and
- (b) other assets.
- (4) Section 440A applies as if for paragraphs (a), (d) and (e) of subsection (2) there were substituted—
- (“) so many of the securities as are included in the company's long-term insurance fund shall be treated for the purposes of corporation tax as a separate holding which is an asset of that fund, and
- (b) any remaining securities shall be treated for those purposes as a separate holding which is not of the description mentioned in the preceding paragraph.”.
- (4A) Section 440(2) does not apply if either the transferor or the company by which the asset is acquired is a company whose profits are charged to tax under section 35 of CTA 2009 (or if they both are).
- (4B) Section 211 of the 1992 Act does not apply in relation to assets which are referable to the life assurance business of the transferor if the transferor is a company whose profits are charged to tax under section 35 of CTA 2009.
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 440C
- (1) Subsection (2) makes provision for a case where—
- (a) subsection (4) of section 431G applies in relation to the profits of the life assurance business of an insurance company for any accounting period, but
- (b) the profits of that business for a succeeding accounting period fall to be charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of subsection (3) of that section.
- (2) The loss referred to in section 431G(4)(b) (less any loss for the same accounting period set off under section 436A for any intervening accounting period and any amount deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989) may be relieved under section 45 of CTA 2010 against profits of that succeeding accounting period (without being reduced in accordance with section 434A(2)(a)).
- (3) In determining whether any loss has been set off under section 436A for any intervening accounting period, or whether any amount has been deducted for any such period in respect of the loss by virtue of section 85A(3)(b) of the Finance Act 1989, losses of earlier accounting periods are to be assumed to be set off before those of later accounting periods.
- (4) Subsection (5) makes provision for a case where—
- (a) a loss arises to an insurance company for an accounting period for which the profits of its life assurance business fall to be charged to tax under section 35 of CTA 2009 by virtue of section 431G(3)(b),
- (b) the profits of that business for a subsequent accounting period are charged to tax under the I minus E basis, and
- (c) had those profits (instead) been charged to tax under section 35 of CTA 2009, any of that loss would have been available to be set off against them under section 45 of CTA 2010.
- (5) The loss is to be treated for the purposes of the operation of section 436A in relation to the subsequent accounting period as if it were a loss arising from its gross roll-up business in the accounting period in which it arose.
- (6) Subsections (7) and (8) make provision for a case where—
- (a) the profits of the life assurance business of an insurance company for an accounting period are charged to tax under the I minus E basis,
- (b) the profits of that business for its next accounting period fall to be charged to tax under section 35 of CTA 2009 by virtue of section 431G(3), and
- (c) that prevents the giving of relief in accordance with section 86(8) of the Finance Act 1989 (acquisition expenses relieved in fractions under section 76).
- (7) Any relief which would have been so given in—
- (a) the next accounting period, or
- (b) any subsequent accounting period for which the profits of the company's life assurance business continue to be charged to tax under section 35 of CTA 2009,
may be given by set-off against any gains treated as accruing under section 213(1) of the 1992 Act at the end of the accounting period.
- (8) But if the profits of the company's life assurance business for a subsequent accounting period are charged to tax under the I minus E basis, any relief not previously given under subsection (7) is to be treated for the purposes of the operation of section 76 in relation to the first subsequent accounting period for which profits are so charged as if it were an amount which is to be relieved under that section by virtue of section 86(8) and (9) of the Finance Act 1989.
#### Special rule for computing chargeable profits.
##### 440D
Schedule 19ABA (which makes modifications of this Act in relation to BLAGAB group reinsurers) shall have effect.
##### 441B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 442A
- (1) Where an insurance company reinsures any risk in respect of a policy or contract attributable to its basic life assurance and general annuity business, the investment return on the policy or contract shall be treated as accruing to the company while the risk remains reinsured by the company under the reinsurance arrangement and shall be charged to tax under the charge to corporation tax on income.
- (2) The Board may make provision by regulations as to the amount of investment return to be treated as accruing in each accounting period during which the reinsurance arrangement is in force.
- (3) The regulations may, in particular, provide that the investment return to be treated as accruing to the company in respect of a policy or contract in any accounting period shall be calculated by reference to—
- (a) the aggregate of the sums paid by the company to the reinsurer during that accounting period and any earlier accounting periods by way of premium or otherwise;
- (b) the aggregate of the sums paid by the reinsurer to the company during that accounting period and any earlier accounting periods by way of commission or otherwise;
- (c) the aggregate amount of the net investment return treated as accruing to the company in any earlier accounting periods, that is to say, net of tax at such rate as may be prescribed; and
- (d) such percentage rate of return as may be prescribed.
- (3A) Where a transfer of the reinsurance arrangement from one insurance company (“*the transferor*”) to another (“*the transferee*”) is effected by novation or an insurance business transfer scheme, for the purpose of calculating the investment return to be treated as accruing to the transferee in respect of the policy or contract after the transfer, the references to the company in subsection (3)(a), (b) and (c) above include (as well as the transferee)—
- (a) the transferor, and
- (b) any insurance company from which the reinsurance arrangement was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.
- (4) The regulations shall provide that the amount of investment return to be treated as accruing . . . in respect of a policy or contract in the final accounting period during which the policy or contract is in force is the amount, ascertained in accordance with regulations, by which the profit over the whole period during which the policy or contract, and the reinsurance arrangement, were in force exceeds the aggregate of the amounts treated as accruing in earlier accounting periods.
- (5) Regulations under this section—
- (a) may exclude from the operation of this section such descriptions of insurance company, such descriptions of policies or contracts and such descriptions of reinsurance arrangements as may be prescribed;
- (b) may make such supplementary provision as to the ascertainment of the investment return to be treated as accruing to the company as appears to the Board to be appropriate, including provision requiring payments made during an accounting period to be treated as made on such date or dates as may be prescribed; and
- (c) may make different provision for different cases or descriptions of case.
- (6) In this section “*prescribed*” means prescribed by regulations under this section.
##### 444AZA
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax in respect of that business under the I minus E basis,
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of section 431G(3), and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) Any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits chargeable under section 436A (a “qualifying loss of the transferor”) shall instead be treated as a loss of the transferee . . . available to be set off against GRBP in relation to a period of account.
- (3) For the purposes of subsection (2) above “*GRBP*”, in relation to a period of account, is—
$P×GRBTLTL$
where—
- *P* is the amount of such profits of the transferee's life assurance business for the period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable),
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of any qualifying loss of the transferor to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined in the same manner as an appeal, and both the transferor and transferee shall be entitled to be a party to any proceedings.
#### Valuation of oil disposed of or appropriated in certain circumstances.
##### 444AZB
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer life assurance business from one person (“*the transferor*”) to another (“*the transferee*”),
- (b) assuming the transferor had continued to carry on the business transferred after the transfer, the amount of any profits would have been charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of section 431G(3),
- (c) the profits in respect of the business transferred for the first period of account of the transferee ending after the date on which the transfer takes effect are charged to tax under the I minus E basis, and
- (d) the conditions in paragraphs (a) and (b) of section 343(1) are satisfied in relation to the business transferred (construing references to an event as to a transfer).
- (2) The relevant fraction of any loss which (assuming the transferor had continued to carry on the business transferred after the transfer) would have been available to be set off against profits of that business (a “qualifying loss of the transferor”) shall instead be treated as a loss of the transferee . . . available to be set off against the amount of such profits chargeable under section 436A for a period of account as relate to the business transferred (that amount being determined in accordance with section 343(9) and (10), where applicable).
- (3) For the purposes of subsection (2) above “*the relevant fraction*”, in relation to a period of account, is—
$GRBTLTL$
where—
- *GRBTL* is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account, and
- *TL* is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.
- (4) Where the transfer is of part only of the transferor's long-term business, subsection (2) above shall apply only to such part of the amount of any qualifying loss of the transferor to which it would otherwise apply as is appropriate.
- (5) Any question arising as to the operation of subsection (4) above shall be determined in the same manner as an appeal, and both the transferor and transferee shall be entitled to be a party to any proceedings.
##### 444AA
- (1) This section applies where the whole of the long-term business of a person (“*the transferor*”) is transferred from that person–
- (a) by one insurance business transfer scheme, or
- (b) by two or more insurance business transfer schemes which take effect on the same date.
- (2) Where (apart from this subsection) there would not be a periodical return of the transferor covering a period ending immediately before the transfer date, there is to be deemed for the purposes of corporation tax to be a periodical return of the transferor covering the period—
- (a) beginning immediately after the last period ending before the transfer date which is covered by a periodical return of the transferor, and
- (b) ending immediately before the transfer date.
- (3) The periodical return deemed to exist by subsection (2) above is to be deemed to contain—
- (a) such entries as would be included in an actual periodical return of the transferor covering the period mentioned in subsection (2) above, and
- (b) such entries as would be included in an actual periodical return of the transferor covering the period—
- (i) beginning immediately after the end of the period mentioned in subsection (2) above, and
- (ii) ending immediately before the transfer had effect,
and the period mentioned in subsection (2) above is to be deemed to be a period of account (but not an accounting period) of the transferor.
- (4) There is to be deemed for the purposes of corporation tax to be a periodical return of the transferor—
- (a) covering the transfer date, and
- (b) containing the appropriate entries.
- (5) In subsection (4) above “*appropriate entries*” means such entries as would be included in an actual periodical return covering the transfer date—
- (a) in line 32 of Form 40, and
- (b) in line 11 of Form 14, in both columns (treating references in that form to “current year” as references to the time immediately after the transfer date and to “previous year” as references to the time immediately before the transfer date).
- (6) A transfer date covered by a periodical return deemed to exist by subsection (4) above is to be deemed to be a period of account of the transferor only for the purpose of taking into account profits under section 444ABD.
- (7) Where—
- (a) a periodical return deemed to exist by subsection (4) above is preceded by an actual periodical return of the transferor covering the period immediately before the transfer date, and
- (b) profits are to be taken into account under section 444ABD in the period of account deemed to exist by subsection (6) above,
those profits are to be deemed for the purposes of corporation tax to be profits arising on the last day of the period of account covered by the actual periodical return.
- (8) Any actual periodical return of the transferor covering a period which includes the transfer date is to be ignored for the purposes of corporation tax.
- (9) In this section and sections 444AB to 444AECC “*the transfer date*”, in relation to an insurance business transfer scheme, means the date on which it takes effect.
##### 444AB
- (1) This section applies where—
- (a) an insurance business transfer scheme has effect to transfer long-term business of a person (“*the transferor*”) to another person (“*the transferee*”), and
- (b) condition A or condition B is met.
- (2) Condition A is met if any of the assets of the transferor's long-term insurance fund which are transferred . . . by the insurance business transfer scheme are not, immediately after their transfer—
- (a) if the transferee is an insurance company or an insurance special purpose vehicle, assets of the transferee's long-term insurance fund, or
- (b) if the transferee is not an insurance company , an insurance special purpose vehicleor a friendly society, assets of a fund of the transferee which would be a with-profits fund if the transferee were an insurance company,
(“relevant non-transferred assets”).
- (3) Condition B is met if, immediately after the transfer date, the transferor—
- (a) does not carry on long-term business, but
- (b) holds any assets which, immediately before the transfer date, were assets of its long-term insurance fund (“retained assets”).
- (4) If there are relevant non-transferred assets or retained assets (or both) the relevant amount in relation to them (see subsection (5) below) is to be taken into account under section 83(2) of the Finance Act 1989 as an increase in value of the assets of the long-term insurance fund of the transferor for the relevant period of account (see subsection (6) below).
- (5) Section 444ABA makes provision for the calculation of the relevant amount in relation to relevant non-transferred assets; and section 444ABB makes provision for its calculation in relation to retained assets.
- (5A) In this section references to assets held by the transferor after the transfer do not include—
- (a) assets held on trust for the transferee, or
- (b) assets held to meet liabilities which have been wholly reinsured and which are intended to be transferred under an insurance business transfer scheme to the reinsurer.
- (6) In this section and sections 444ABA to 444AC “*the relevant period of account*” means the period of account of the transferor ending, or treated by section 444AA(2) as ending, immediately before the transfer date.
- (7) See section 444AA for the meaning of “the transfer date” in this section.
- (8) For the purpose of paragraph (2)(a), in relation to an insurance special purpose vehicle which is not an insurance company, “*long-term insurance fund*” has the meaning it has in paragraph 4(5) of Schedule 19ABA.
##### 444ABA
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are relevant non-transferred assets is—
$$FVA-BTO$where—FVA is the fair value of the assets on the transfer date, andBTO is the lesser of ABTO and AL13, where—ABTO is any amount brought into account in respect of the assets as a business transfer-out and shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor for the period of account of the transferor including the transfer date, andAL13 is any positive amount shown (or treated as shown) in line 13 of Form 14 in the periodical return for the last period of account of the transferor ending before the transfer date.$
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (7) See section 444AA for the meaning of “the transfer date”. . . in this section.
##### 444ABAA
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are non-profit fund transferred assets is—
$$FVA-(ABTO+TL)$where—FVA is the fair value of the assets on the transfer date,ABTO is any amount brought into account in respect of the assets as a business transfer-out and shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor for the period of account of the transferor including the transfer date, andTL is the amount of any non-profit fund transferred liabilities which are shown (or treated as shown) in any of lines 17, 21 to 23 and 31 to 38, but not in line 61, in Form 14 in the periodical return for the period of account of the transferor ending (or treated as ending by section 444AA) immediately before the transfer date or, if there is no period of account of the transferor so ending (or treated as so ending), the amount of any liabilities which would be so shown if one did.$
- (2) In subsection (1) “*non-profit fund transferred liabilities*” means such of the liabilities of the transferor's long-term insurance fund as are transferred from the transferor to the transferee by the insurance business transfer scheme and were, immediately before their transfer, liabilities of a non-profit fund of the transferor.
- (3) See section 444AA for the meaning of “the transfer date” in this section.
#### Loan relationships etc.
##### 444ABB
- (1) For the purposes of section 444AB the relevant amount in relation to assets that are retained assets is—
$FVA-ABDP-RL13-RRL$
where—
- FVA is the fair value of the assets on the transfer date,
- ABDP is the amount of the profits to be taken into account as profits under section 444ABD,
- RL13 is the amount by which AL13 exceeds VE, and
- RRL is the value of any relevant retained liabilities immediately after the transfer date.
But the relevant amount is nil if it would otherwise be below nil.
- (1A) For the purposes of subsection (1) above—
- (a) AL13 is any positive amount shown (or treated as shown) in line 13 of Form 14 in the periodical return for the last period of account of the transferor ending before the transfer date;
- (b) VE is the amount (if any) by which VL32 exceeds VTL where—
- (i) VL32 is the value of the assets shown (or treated as shown) in line 32 of Form 40 in the periodical return of the transferor covering (or treated as covering) the transfer date, and
- (ii) VTL means the amount of the mathematical reserves (as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook) transferred by the insurance business transfer scheme; and
- (c) relevant retained liabilities are any liabilities of the company's long-term business which are owed by the company immediately after the transfer date and are shown (or treated as shown) in any of lines 17, 21 to 23 and 31 to 38 in Form 14 in a periodical return for the period of account ending (or treated as ending by section 444AA) immediately before the transfer date.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABBA
- (1) This section applies where an insurance business transfer scheme has effect to transfer long-term business from one person (“*the transferor*”) to another (“*the transferee*”).
- (2) If the transferor and the transferee jointly elect, the transferee (and not the transferor) is chargeable to any amount of additional corporation tax to which the transferor would otherwise be chargeable by virtue of section 444AB(4) in relation to relevant non-transferred assets.
- (3) An election under subsection (2) above—
- (a) is to be irrevocable, and
- (b) is to be made by notice to an officer of Revenue and Customs no later than the end of the period of 90 days beginning with the day following the transfer date,
and a copy of the notice containing the election must accompany the tax return of the transferee for the first accounting period ending after the transfer. Paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.
- (4) Where an election under subsection (2) above has been made, the transferor must inform the transferee of—
- (a) the amount of any additional corporation tax to which the transferor considers the election to apply, and
- (b) the day on which that tax is due and payable,
no later than the end of the period of 8 months beginning with the day following the transfer date.
- (5) Tax chargeable on the transferee by virtue of an election under subsection (2) above—
- (a) is due in accordance with section 59D of the Management Act on the day on which it would have been due if no election had been made, and
- (b) for the purposes of that section, is to be treated as tax payable by the transferor (and not as tax payable by the transferee).
- (6) See section 444AA for the meaning of “the transfer date” in this section.
##### 444ABC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444ABD
- (1) Any profits representing the amount by which—
- (a) the amount of the mathematical reserves (as determined in accordance with section 1.2 of the Insurance Prudential Sourcebook) transferred by an insurance business transfer scheme, exceeds
- (b) the value of the assets transferred by the insurance business transfer scheme shown (or treated as shown) in line 32 of Form 40 of the periodical return of the transferor for the period of account of the transferor including the transfer date,
are to be taken into account as profits of that period of account in accordance with subsections (1A) and (1C) below.
- (1A) Where the profits of the life assurance business of the transferor for a period of account are charged to tax under section 35 of CTA 2009 (charge on trade profits) by virtue of section 431G(3), the appropriate fraction of the amount of the profits to which subsection (1) above applies is to be taken into account as profits of that period of account chargeable to tax under section 35 of that Act (and not otherwise).
- (1B) For the purposes of subsection (1A) above “the appropriate fraction” is the appropriate fraction for the purposes of section 432G(1).
- (1C) Where the profits of the life assurance business of the transferor for a period of account are charged to tax under the I minus E basis, the relevant fraction of the amount of the profits to which subsection (1) above applies is to be taken into account as profits of that period of account chargeable to tax under section 436A (and not otherwise).
- (1D) For the purposes of subsection (1C) above “the relevant fraction” is the relevant fraction for the purposes of section 432G(4).
- (1E) Where the value mentioned in paragraph (b) of subsection (1) above exceeds the amount mentioned in paragraph (a) of that subsection, the amount of the excess is not to be taken into account as a loss of the transferor.
- (2) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AC
- (1) This section applies where an insurance business transfer scheme has effect to transfer . . . long-term business of a person (“*the transferor*”) to another person (“*the transferee*”) and the condition in subsection (2) below is met.
- (2) The condition is that the transferor did not carry on life assurance business that is mutual business during the relevant period of account.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) The amount which (apart from this section) would be regarded as other income of the transferee for the purposes of section 83(2)(e) of the Finance Act 1989 for the period of account of the transferee which includes the transfer date is to be reduced by an amount equal to the lesser of the transferred surplus and any positive amount shown (or treated as shown) in line 13 of Form 14 in the periodical return for the last period of account of the transferor ending before the transfer date.
- (5) In subsection (4) above “*the transferred surplus*”is VE – RBTO where—
- (a) VE has the same meaning as in section 444ABB, and
- (b) RBTO means so much of BTO as relates to relevant non-transferred assets transferred to the transferee where—
- (i) BTO has the same meaning as in section 444ABA, and
- (ii) “*relevant non-transferred assets*” has the same meaning as in section 444AB.
- (5A) Where the transfer is to more than one transferee, the amount of any reduction to be made in accordance with subsection (4) above is to be apportioned to each transferee on a just and reasonable basis.
- (6) See section 444AA for the meaning of “the transfer date”, and section 444AB for the meaning of “the relevant period of account”, in this section.
##### 444ACZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444ACA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444AD
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 444AE
- (1) Where an insurance business transfer scheme has effect to transfer the relevant financing arrangements entered into in relation to a non-profit fund of an insurance company (“*the transferor*”) to another person (“*the transferee*”), after the transfer—
- (a) they are to be treated for the purposes of sections 83YC and 83YD of the Finance Act 1989 as having been entered into by the transferee, but
- (b) the references in those sections to earlier periods of account of the transferee include earlier periods of account of the transferor.
- (2) But if the insurance business transfer scheme has effect—
- (a) to transfer some but not all of the relevant financing arrangements entered into in relation to the non-profit fund of the transferor, or
- (b) to transfer all of those relevant financing arrangements but not all to one person,
any calculation required by virtue of section 83YC or 83YD in relation to a period of account of the transferor, or of the transferee or any of the transferees, ending after the transfer is to be made on a just and reasonable basis.
- (3) Subsection (4) below applies where—
- (a) relevant financing arrangements have been entered into in relation to a non-profit fund of an insurance company (“the old company”), and
- (b) as a result of any transaction other than an insurance business transfer scheme, another insurance company (“the new company”) becomes the debtor in respect of the money debt, or the cedant, under the financial reinsurance arrangements.
- (4) Where this subsection applies, after the transaction—
- (a) the relevant financing arrangements are to be treated for the purposes of sections 83YC and 83YD as having been entered into by the new company, but
- (b) the references in those sections to earlier periods of account of the new company include earlier periods of account of the old company, and
- (c) the transaction is not to be regarded as causing the condition in section 83YD(3) to be met in relation to the old company.
- (5) But if the transaction has effect—
- (a) to transfer some but not all of the relevant financing arrangements entered into in relation to the non-profit fund of the old company, or
- (b) to transfer all of those relevant financing arrangements but not all to one person,
any calculation required by virtue of section 83YC or 83YD in relation to a period of account of the old company, or of the new company or any of the new companies, ending after the transaction is to be made on a just and reasonable basis.
- (6) Expressions used in this section and section 83YC or 83YD have the same meanings here as there.
##### 444AEA
- (1) This section applies where—
- (a) as a result of the whole . . . of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a life assurance trade profits advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of the whole . . . of the transfer scheme arrangements is the obtaining of that . . . advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” means an insurance business transfer scheme (“*the relevant transfer scheme*”) together with any relevant associated operations.
- (3) If a life assurance trade profits advantage is obtained by the transferor (see subsection (1) of section 444AEB), the amount of the . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor—
- (a) to the extent that the advantage is obtained by the transferor in the period of account covering the transfer date or any earlier period of account—
- (i) for the period of account of the transferor ending (or treated as ending) immediately before the transfer date, or
- (ii) where there is no such period, for the period of account of the transferor including the transfer date, and
- (b) to the extent that the advantage is obtained by the transferor in any later period of account of the transferor in which any relevant associated operations are effected, for that later period of account.
- (4) If a life assurance trade profits advantage is obtained by the transferee (see subsection (1) of section 444AEC), the amount of the . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the period of account of the transferee in which the advantage is obtained by the transferee.
- (5) In this section and sections 444AEB to 444AECC“*relevant associated operations*”, in relation to the relevant transfer scheme, means—
- (a) any other insurance business transfer scheme,
- (b) any contract of reinsurance,
- (c) any reconstruction or amalgamation involving the transferor, a dependant of the transferor which is an insurance undertaking or the transferee, or
- (d) any surplus-increasing transfer of assets,
which is effected in connection with the relevant transfer scheme.
- (6) In subsection (5) above—
- “*dependant*” and “*insurance undertaking*” have the same meaning as in the Insurance Prudential Sourcebook, and
- “*surplus-increasing transfer of assets*” means a transfer of assets of the transferor's long-term insurance fund to the transferee which is not brought into account for any period of account of the transferee but increases the amount of total surplus shown in line 39 of Form 58 in any periodical return of the transferee.
- (7) See section 444AA for the meaning of “the transfer date” in this section.
##### 444AEB
- (1) A life assurance trade profits advantage is obtained by the transferor if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (2) If a life assurance trade profits advantage is obtained by the transferor, the amount of the advantage is the aggregate of—
- (a) the amounts (if any) by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, and
- (b) the amounts (if any) by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (3) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (4) In this section and sections 444AEC, 444AECB and 444AECC—
- “*section 35 profits*” and “*section 35 losses*” means profits and losses computed in accordance with the life assurance trade profits provisions, and
- “the relevant time” is the time at which any application under section 444AED is made, or, if no such application is made, the transfer date.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AEC
- (1) A life assurance trade profits advantage is obtained by the transferee if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (2) If a life assurance trade profits advantage is obtained by the transferee, the amount of the advantage is—
- (a) the amount by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the whole of the transfer scheme arrangements, or
- (b) the amount by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the whole of the transfer scheme arrangements.
- (3) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (4) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “ section 35 profits” and “ section 35 losses” and “the relevant time”, in this section.
##### 444AECA
- (1) This section applies where—
- (a) as a result of any part of transfer scheme arrangements involving the transfer of long-term business from one person (“*the transferor*”) to another (“*the transferee*”) a life assurance trade profits advantage is obtained by the transferor or the transferee (or by both), and
- (b) the sole or main purpose, or one of the main purposes, of that part of the transfer scheme arrangements is the obtaining of that . . . advantage.
- (2) In subsection (1) above “*transfer scheme arrangements*” has the same meaning as in section 444AEA.
- (3) If a life assurance trade profits advantage is obtained by the transferor (see subsection (1) of section 444AECB), the amount of the . . . advantage (see subsection (3) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferor—
- (a) to the extent that the advantage is obtained by the transferor in the period of account covering the transfer date or any earlier period of account—
- (i) for the period of account of the transferor ending (or treated as ending) immediately before the transfer date, or
- (ii) where there is no such period, for the period of account of the transferor including the transfer date, and
- (b) to the extent that the advantage is obtained by the transferor in any later period of account of the transferor in which any relevant associated operations are effected, for that later period of account.
- (4) If a life assurance trade profits advantage is obtained by the transferee (see subsection (1) of section 444AECC), the amount of the . . . advantage (see subsection (2) of that section) is to be taken into account as an increase in value of the assets of the long-term insurance fund of the transferee for the period of account of the transferee in which the advantage is obtained by the transferee.
- (5) See section 444AA for the meaning of “the transfer date”, and section 444AEA for the meaning of “relevant associated operations”, in this section.
##### 444AECB
- (1) A life assurance trade profits advantage is obtained by the transferor if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the section 35 profits to be greater or the section 35 losses to be less than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a life assurance trade profits advantage is obtained by the transferor.
- (3) If a life assurance trade profits advantage is obtained by the transferor, the amount of the advantage is the aggregate of—
- (a) the amounts (if any) by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, and
- (b) the amounts (if any) by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the period of account of the transferor covering the transfer date,
- (b) any earlier period of account of the transferor, or
- (c) where any relevant associated operations are effected in any later period of account, that period of account.
- (5) In this section and section 444AECC “*the relevant part of the arrangements*” means, in relation to a life assurance trade profits advantage, the part of the transfer scheme arrangements as a result of which the advantage is obtained.
- (6) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations” and section 444AEB for the meaning of “ section 35 profits” and “ section 35 losses” and “the relevant time”, in this section.
##### 444AECC
- (1) A life assurance trade profits advantage is obtained by the transferee if—
- (a) section 35 profits of its life assurance business for a period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for any part of the transfer scheme arrangements, or
- (b) section 35 losses of its life assurance business for such a period of account are, or at the relevant time are expected to be, greater than they would be but for the any part of the transfer scheme arrangements.
- (2) But if any of the relevant associated operations would, by itself, cause the section 35 profits to be greater, or the section 35 losses to be less, than they would be but for that operation, the amount by which those profits would be greater or those losses would be less shall be taken into account in determining whether a life assurance trade profits advantage is obtained by the transferor.
- (3) If a life assurance trade profits advantage is obtained by the transferee, the amount of the advantage is—
- (a) the amount by which section 35 profits for each period of account to which this section applies are, or at the relevant time are expected to be, less than they would be but for the relevant part of the arrangements, or
- (b) the amount by which section 35 losses for each such period of account are, or at the relevant time are expected to be, greater than they would be but for the relevant part of the arrangements.
- (4) This section applies to a period of account if it is—
- (a) the first period of account of the transferee ending after the transfer date or after the effecting of the first of any relevant associated operations (if that occurs before the transfer date),
- (b) the second period of account of the transferee ending after the transfer date or after the effecting of the last of any relevant associated operations (if that occurs after the transfer date), or
- (c) any intervening period of account.
- (5) See section 444AA for the meaning of “the transfer date”, section 444AEA for the meaning of “relevant associated operations”, section 444AEB for the meaning of “ section 35 profits” and “ section 35 losses” and “the relevant time” and section 444AECB for the meaning of “the relevant part of the arrangements”, in this section.
##### 444AED
- (1) Sections 444AEA and 444AECA do not apply in relation to the transferor or the transferee if, on an application under this section, the Commissioners for Her Majesty's Revenue and Customs (“the HMRC Commissioners”) have given a notice under subsection (2) below.
- (2) A notice under this subsection is a notice stating that the HMRC Commissioners are satisfied—
- (a) that the obtaining of a life assurance trade profits advantage by the applicant is not the sole or main purpose of the whole or any part of the transfer scheme arrangements, or
- (b) that the transferor and the transferee are members of the same group of companies and that there is no advantage to the group arising from any life assurance trade profits advantage obtained by the transferor or by the transferee.
- (3) For the purposes of this section there is no advantage to a group arising from any life assurance trade profits advantage obtained by the transferor or by the transferee if—
- (a) as a result of transfer scheme arrangements, there is an increase in the liability to corporation tax of one or more companies which are members of the group of companies, and
- (b) the amount (or aggregate amount) of that increase is not less than the reduction in the liability to corporation tax of the transferor or the transferee (or both) arising from the obtaining of the life assurance trade profits advantage.
- (4) An application under this section must be in writing and contain particulars of the transfer scheme arrangements.
- (5) The HMRC Commissioners may by notice require the applicant to provide further particulars in order to enable them to determine the application.
- (6) A requirement may be imposed under subsection (5) above within 30 days of the receipt of the application or of any further particulars required under that subsection.
- (7) If a notice under subsection (5) above is not complied with within 30 days or such longer period as the HMRC Commissioners may allow, they need not proceed further on the application.
- (8) The HMRC Commissioners must give notice of their decision on an application under this section to the applicant within 30 days of receiving the application or, if they give a notice under subsection (5) above, within 30 days of that notice being complied with.
- (9) If the HMRC Commissioners—
- (a) give notice to the applicant under subsection (8) above that they are not satisfied as mentioned in subsection (2) above, or
- (b) do not comply with subsection (8) above,
the applicant may require them to transmit the application to the tribunal.
- (10) A requirement under subsection (9) above must be imposed within 30 days of the giving of the notice or the failure to comply and must be accompanied by any notice given under subsection (5) above and further particulars provided pursuant to any such notice.
- (11) Any notice given by the tribunal has effect for the purposes of subsection (1) above as if it were given by the HMRC Commissioners.
- (12) If any particulars provided under this section do not fully and accurately disclose all facts and considerations material for the decision of the HMRC Commissioners or the tribunal, any resulting notice that they are satisfied as mentioned in subsection (2) above is void.
- (13) For the purposes of this section two companies are members of the same group of companies if they are for the purposes of Part 5 of CTA 2010.
### Surpluses of mutual and former mutual businesses
##### 444AF
- (1) This section applies in relation to a period of account of an insurance company (“*the relevant period*”) if—
- (a) at any time in the relevant period the company carries on life assurance business that is not mutual business,
- (b) the company has an amount of undistributed demutualisation surplus for the relevant period (see subsection (7)), and
- (c) there is a reduction in the amount of the company's unappropriated surplus over the relevant period (see section 444AI).
- (2) Where this section applies in relation to the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund whichever of the following amounts is the smallest—
- (a) the amount of the reduction mentioned in subsection (1)(c) above;
- (b) the amount of the company's undistributed demutualisation surplus for the relevant period;
- (c) the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (4) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which section 432C applies,
that subsection shall have effect as if for “smallest” there were substituted smaller and as if paragraph (c) were omitted.
- (5) This section shall have effect—
- (a) for the purposes of computing in accordance with the life assurance trade profits provisions the profits of the company's life assurance business, and
- (b) for the purposes of so computing profits of the company chargeable . . . under section 436A (gross roll-up business).
- (6) But for the purposes mentioned in subsection (5)(b) above, this section and section 444AG have effect subject to the modification in section 444AH; and the Corporation Tax Acts have effect accordingly (so that there may, in particular, be a difference between—
- (a) the amount deemed to be brought into account by virtue of subsection (2) above for a period of account for those purposes, and
- (b) the amount so deemed to be brought into account for that period of account for the purposes mentioned in subsection (5)(a) above).
- (7) For the purposes of this section, the undistributed demutualisation surplus of an insurance company for the relevant period is—
- (a) an amount equal to (UDSP – AD + DTSI – DTSO); or
- (b) if that amount is a negative amount, nil.
For this purpose—
- UDSP is the undistributed demutualisation surplus of the company for the period of account immediately preceding the relevant period,
- AD is any amount deemed under this section to be brought into account for the period of account immediately preceding the relevant period as an increase in the value of the assets of the company's long-term insurance fund,
- DTSI is the total amount of any demutualisation transfer surpluses accruing to the company during the relevant period (see section 444AG),
- DTSO is the total amount of any demutualisation transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
##### 444AG
- (1) For the purposes of section 444AF and this section, a demutualisation transfer surplus accrues to an insurance company where—
- (a) life assurance business is transferred to the company by a person (“*the transferor*”),
- (b) after the transfer, the company carries on the transferred business otherwise than as mutual business, and
- (c) the condition in subsection (2) below is satisfied in relation to the transfer.
- (2) The condition is that—
- (a) immediately before the transfer, the transferor carried on the transferred business as mutual business, or
- (b) where paragraph (a) above does not apply, some or all of the transferred business was carried on by an insurance company as mutual business at a time on or after 1st January 1990 and before the transfer (“former mutual business”).
- (3) The demutualisation transfer surplus accrues to the company on the date of the transfer.
- (4) The amount of the demutualisation transfer surplus is given by subsection (5) or (6) below.
- (5) Where subsection (2)(a) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer, the aggregate of—
- (i) the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer, and
- (ii) the amount of any added surplus accruing to the company in connection with the transfer (see subsection (10));
- (b) otherwise, a just and reasonable portion of that aggregate amount, having regard to how much of the transferor's life assurance business was transferred to the company under the transfer.
- (6) Where subsection (2)(b) above applies, the amount of the demutualisation transfer surplus is—
- (a) where the whole of the transferor's life assurance business was transferred to the company under the transfer and all of the transferred business is former mutual business, the former mutual surplus of the transferor on the transfer date (see subsection (7));
- (b) otherwise, so much of that former mutual surplus as it is just and reasonable to attribute to the company, having regard in particular to—
- (i) how much of the transferor's life assurance business was transferred to the company under the transfer, and
- (ii) how much of the transferred business is former mutual business.
- (7) For the purposes of subsection (6) above, the former mutual surplus of the transferor on the transfer date is—
- (a) the amount given by subsection (8) below, or
- (b) if less, the amount given by subsection (9) below.
- (8) The amount given by this subsection is the total amount of any demutualisation transfer surpluses accruing to the transferor—
- (a) on or after 1st January 1990, and
- (b) on or before the date of the transfer.
- (9) The amount given by this subsection is the lowest amount of unappropriated surplus of the transferor at the end of any period of account ending—
- (a) on or after the date of the last occasion on which a demutualisation transfer surplus accrued to it as mentioned in subsection (8) above, and
- (b) on or before the date of the transfer.
- (10) For the purposes of this section, added surplus accrues to the company in connection with the transfer if—
- (a) an amount of assets is received by the company in connection with the transfer, no later than six months after the date of the transfer,
- (b) the amount is not brought into account by the company,
- (c) the amount is added to the unappropriated surplus of the company, and
- (d) the amount does not derive from any unappropriated surplus of the transferor;
and the amount of the added surplus is the amount referred to in paragraphs (a) to (d) above.
##### 444AH
- (1) The modification in this section has effect for the purposes mentioned in section 444AF(5)(b) only.
- (2) In relation to any demutualisation transfer surplus accruing to a company in a post-2002 period of account—
- (a) the references in section 444AG(5) to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer shall be taken to be references to—
- (i) the amount of that unappropriated surplus, or
- (ii) if less, the unappropriated surplus of the transferor at the end of the period of account immediately preceding the first post-2002 period of account of the transferor; and
- (b) the references in sections 444AF and 444AG to the amount of any demutualisation transfer surplus are to have effect accordingly.
- (3) In this section “*post-2002 period of account*”, in relation to an insurance company, means a period of account of the company beginning on or after 1st January 2003 and ending on or after 9th April 2003.
##### 444AI
- (1) For the purposes of section 444AF—
- (a) there is a reduction in the amount of the company's unappropriated surplus over the relevant period if CUS is less than (OUS + TSI – TSO);
- (b) the amount of that reduction is the amount by which CUS is less than (OUS + TSI – TSO).
- (2) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- TSI is the total amount of any transfer surpluses accruing to the company during the relevant period (see subsections (3) to (7)),
- TSO is the total amount of any transfer surpluses accruing to any other company (or companies) during the relevant period on a transfer (or transfers) of life assurance business by the company to that other company (or companies).
- (3) For the purposes of this section, a transfer surplus accrues to an insurance company where life assurance business is transferred to the company by a person (“*the transferor*”).
- (4) The transfer surplus accrues to the company on the date of the transfer.
- (5) The amount of the transfer surplus is equal to so much of the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer as is transferred to the company under the transfer.
- (6) But if, immediately before the transfer, the transferor carried on the transferred business as mutual business, the amount of the transfer surplus is the aggregate of—
- (a) the amount given by subsection (5) above, and
- (b) the amount of any added surplus accruing to the company in connection with the transfer.
- (7) Subsection (10) of section 444AG applies for the purposes of subsection (6) above as it applies for the purposes of that section.
##### 444AJ
- (1) For the purposes of sections 444AF and 444AK, the amount of the company's relevant receipts reduction for the relevant period is to be calculated by—
- (a) determining, in the case of each with-profits fund of the company, the amount given by subsection (2) or (6) below for the relevant period, and
- (b) aggregating each of those amounts.
- (2) The amount, in the case of a fund other than a policy holder participation fund, is—
- (a) where the gross transfer to non-technical account for the fund for the relevant period (see subsections (3) and (4)) is greater than the post-policy holder surplus for the fund for the relevant period (see subsection (5)), the amount of the difference;
- (b) otherwise, nil.
- (3) In this section “*the gross transfer to non-technical account*” means the amount shown in line 13 of Form 58 for the fund.
- (4) But if—
- (a) there is a transfer from a with-profits fund of the company to another fund of the company (“the initial transfer”) which is shown in (or included in an amount shown in) line 14 of Form 58 for the with-profits fund,
- (b) there is a transfer from a fund of the company (whether or not the other fund mentioned in paragraph (a) above) to the non-technical account which is shown in (or included in an amount shown in) line 13 of Form 58 for that fund, and
- (c) the transfer to the non-technical account can reasonably be regarded as connected with the initial transfer,
the amount of the gross transfer to non-technical account for the relevant period given by subsection (3) above in the case of the with-profits fund is to be increased by the amount transferred to the non-technical account.
- (5) In this section “*post-policy holder surplus*” means an amount equal to—
$$SA-TAP$where—SA is—(a) the amount shown in line 34 of Form 58 for the fund (surplus arising since last valuation), or(b) if that amount is a negative amount, nil;TAP is the amount shown in line 46 of Form 58 for the fund (total allocated to policy holders).$
- (6) The amount, in the case of a policy holder participation fund, is—
- (a) where TAP is greater than SA, the amount of the difference;
- (b) otherwise, nil;
and for this purpose “*SA*” and “*TAP*” have the same meaning as in subsection (5) above.
- (7) References in this section to Form 58 are references to that Form in the periodical return of the company for the relevant period.
- (8) In this section “*policy holder participation fund*” means a fund in the case of which an amount equal to the amount shown in line 34 of Form 58 for the fund is allocated to policy holders for the relevant period.
##### 444AK
- (1) This section applies if at any time in a period of account of an insurance company (“*the relevant period*”)—
- (a) the company carries on life assurance business as mutual business, and
- (b) the company carries on gross roll-up business.
- (2) If there is a reduction in the amount of the company's unappropriated surplus over the relevant period, there shall be deemed for the purposes of section 83(2) of the Finance Act 1989 to be brought into account for the relevant period as an increase in the value of the assets of the company's long-term insurance fund—
- (a) the amount of that reduction, or
- (b) if less, the amount of the company's relevant receipts reduction for the relevant period (see section 444AJ).
- (3) But subsection (2) above shall have effect only for the purposes of computing in accordance with the life assurance trade profits provisions the profits for the relevant period of the company's gross roll-up business.
- (4) If the company prepares for the relevant period one or more such separate revenue accounts as are mentioned in section 83A(2)(b) of the Finance Act 1989—
- (a) subsection (2) above shall apply separately in relation to each separate revenue account which is recognised for the purposes of section 83 of that Act; and
- (b) for that purpose, any amount that falls to be determined in order to determine—
- (i) whether that subsection applies in relation to any such separate revenue account, and
- (ii) if so, the amount to be brought into account under that subsection in relation to that account,
shall be determined using only amounts or items which relate to the separate revenue account concerned.
- (5) In applying subsection (2) above in relation to a revenue account or separate revenue account which—
- (a) is recognised for the purposes of section 83 of that Act, and
- (b) is one in relation to which section 432C applies,
that subsection shall have effect as if paragraph (b) and the word “or” before it were omitted.
- (6) For the purposes of this section, there is a reduction in the amount of the company's unappropriated surplus over the relevant period if—
- (a) CUS is less than OUS, and
- (b) CUS is less than UUS.
- (7) The amount of that reduction is—
- (a) the amount by which CUS is less than OUS, or
- (b) if OUS is greater than UUS, the amount by which CUS is less than UUS.
- (8) In this section—
- CUS is the amount of the company's unappropriated surplus at the end of the relevant period,
- OUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the relevant period,
- UUS is the amount of the company's unappropriated surplus at the end of the period of account immediately preceding the first period of account of the company to begin on or after 1st January 2003 and to end on or after 9th April 2003.
##### 444AL
- (1) This section applies for the purposes of sections 444AF to 444AK.
- (2) References to mutual business, in relation to any time, include business which at that time is treated for the purposes of section 432E as mutual business.
- (3) “*Unappropriated surplus*”, in relation to a period of account of an insurance company, means an unappropriated surplus on valuation as shown in the periodical return of the company for the period of account.
- (4) References to the unappropriated surplus of the transferor at the end of the period of account of the transferor ending immediately before the transfer are, where a period of account of the transferor does not end at that time, references to the unappropriated surplus on valuation that would have been shown in a periodical return of the transferor for that period had such a return been drawn up.
### Provisions applying in relation to overseas life insurance companies
##### 444B
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#### Certified unit trusts: distributions.
##### 444C
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##### 444D
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##### 444E
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### Equalisation reserves
##### 444BA
- (1) Subject to the following provisions of this section and to sections 444BB to 444BD, the rules in subsection (2) below shall apply in making any computation, for the purposes of section 35 of CTA 2009 (charge on trade profits), of the profits or losses for any accounting period of an insurance company whose business has at any time been or included business in respect of which it was required, by virtue of equalisation reserve rules, to maintain an equalisation reserve.
- (2) Those rules are—
- (a) that amounts which, in accordance with equalisation reserve rules, are transferred into the equalisation reserve in respect of the company’s business for the accounting period in question are to be deductible;
- (b) that amounts which, in accordance with any such regulations, are transferred out of the reserve in respect of the company’s business for that period are to be treated as receipts of that business; and
- (c) that it must be assumed that all such transfers as are required by equalisation reserve rules to be made into or out of the reserve in respect of the company’s business for any period are made as required.
- (3) Where an insurance company having any business in respect of which it is required, by virtue of equalisation reserve rules, to maintain an equalisation reserve ceases to trade—
- (a) any balance which exists in the reserve at that time for the purposes of the Tax Acts shall be deemed to have been transferred out of the reserve immediately before the company ceases to trade; and
- (b) that transfer out shall be deemed to be a transfer in respect of the company’s business for the accounting period in which the company so ceases and to have been required by equalisation reserve rules.
- (4) Where—
- (a) an amount is transferred into an equalisation reserve in respect of the business of an insurance company for any accounting period,
- (b) the rule in subsection (2)(a) above would apply to the transfer of that amount but for this subsection,
- (c) that company by notice in writing to an officer of the Board makes an election in relation to that amount for the purposes of this subsection, and
- (d) the notice of the election is given not more than two years after the end of that period,
the rule mentioned in subsection (2)(a) above shall not apply to that transfer of that amount and, instead, the amount transferred (the “unrelieved transfer”) shall be carried forward for the purposes of subsection (5) below to the next accounting period and (subject to subsection (6) below) from accounting period to accounting period.
- (5) Where—
- (a) in accordance with equalisation reserve rules, a transfer is made out of an equalisation reserve in respect of an insurance company’s business for any accounting period,
- (b) the rule in subsection (2)(b) above would apply to the transfer but for this subsection, and
- (c) the accounting period is one to which any amount representing one or more unrelieved transfers has been carried forward under subsection (4) above,
that rule mentioned in subsection (2)(b) above shall not apply to that transfer except to the extent (if any) that the amount of the transfer exceeds the aggregate of the amounts representing unrelieved transfers carried forward to that period.
- (6) Where in the case of any company—
- (a) any amount representing one or more unrelieved transfers is carried forward to an accounting period in accordance with subsection (4) above, and
- (b) by virtue of subsection (5) above the rule in subsection (2)(b) above does not apply to an amount representing the whole or any part of any transfer out of an equalisation reserve in respect of the company’s business for that period,
the amount mentioned in paragraph (a) above shall not be carried forward under subsection (4) above to the next accounting period except to the extent (if any) that it exceeds the amount mentioned in paragraph (b) above.
- (7) To the extent that any actual or assumed transfer in accordance with equalisation reserve rules of any amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes—
- (a) the rule in subsection (2)(a) above shall not apply to that transfer; and
- (b) the making of that transfer shall be disregarded in determining, for the purposes of the Tax Acts, whether and to what extent there is subsequently any requirement to make a transfer into or out of the reserve in accordance with equalisation reserve rules;
and this subsection applies irrespective of whether the insurance company in question is a party to the arrangements.
- (8) For the purposes of this section the transfer of an amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes to the extent that the arrangements to which it is attributable are arrangements—
- (a) the sole or main purpose of which is, or
- (b) the sole or main benefit accruing from which might (but for subsection (7) above) be expected to be,
the reduction by virtue of this section of any liability to tax.
- (9) Where—
- (a) any transfer made into or out of an equalisation reserve maintained by an insurance company is made in accordance with equalisation reserve rules in respect of business carried on by that company over a period (“the equalisation period”), and
- (b) parts of the equalisation period are in different accounting periods,
the amount transferred shall be apportioned for the purposes of this section between the different accounting periods in the proportions that correspond to the number of days in the equalisation period that are included in each of those accounting periods.
- (10) The Treasury may by regulations provide in relation to any accounting periods ending on or after 1st April 1996 for specified transitional provisions contained in equalisation reserve rules to be disregarded for the purposes of the Tax Acts in determining how much is required, on any occasion, to be transferred into or out of any equalisation reserve in accordance with the rules.
- (11) In this section, and in sections 444BB to 444BD, “equalisation reserves rules” means the rules in chapter 1.4 of the Insurance Prudential Sourcebook.
##### 444BB
- (1) The Treasury may by regulations make provision modifying section 444BA so as, in cases mentioned in subsection (2) below—
- (a) to require—
- (i) sums by reference to which the amount of any transfer into or out of an equalisation reserve falls to be computed, or
- (ii) the amount of any such transfer,
to be apportioned between different parts of the business carried on for any period by an insurance company; and
- (b) to provide for the purposes of corporation tax for the amounts taken to be transferred into or out of an equalisation reserve to be computed disregarding any such sum or, as the case may be, any such part of a transfer as is attributed, in accordance with the regulations, to a part of the business described for the purpose in the regulations.
- (2) Those cases are cases where an insurance company which, in accordance with equalisation reserve rules, is required to make transfers into or out of an equalisation reserve in respect of any business carried on by that company for any period is carrying on, for the whole or any part of that period—
- (a) any business the income and gains of which fall to be disregarded in making a computation of the company’s profits in accordance with the rules applicable for the purposes of section 35 of CTA 2009 (charge on trade profits), or
- (b) any business by reference to which double taxation relief is afforded in respect of any income or gains.
- (3) Section 444BA shall have effect (subject to any regulations under subsection (1) above) in the case of an equalisation reserve maintained by an insurance company which—
- (a) is not resident in the United Kingdom, and
- (b) carries on business in the United Kingdom through a permanent establishment,
only if such conditions as may be prescribed by regulations made by the Treasury are satisfied in relation to that company and in relation to transfers into or out of that reserve.
- (4) Regulations under this section prescribing conditions subject to which section 444BA is to apply in the case of any equalisation reserve maintained by an insurance company may—
- (a) contain conditions imposing requirements on the company to furnish the Board with information with respect to any matters to which the regulations relate, or to produce to the Board documents or records relating to any such matters; and
- (b) provide that, where any prescribed condition is not, or ceases to be, satisfied in relation to the company or in relation to transfers into or out of that reserve, there is to be deemed for the purposes of the Tax Acts to have been a transfer out of that reserve of an amount determined under the regulations.
- (5) Regulations under this section may—
- (a) provide for apportionments under the regulations to be made in such manner, and by reference to such factors, as may be specified or described in the regulations;
- (b) make different provision for different cases;
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit;
- (d) make provision having retrospective effect in relation to accounting periods beginning not more than one year before the time when the regulations are made;
and the powers conferred by this section in relation to transfers into or out of any reserve shall be exercisable in relation to both actual and assumed transfers.
- (6) In this section “*double taxation relief*” means—
- (a) relief under double taxation arrangements which takes the form of a credit allowed against corporation tax, or
- (b) relief under section 18(1)(b) and (2) of TIOPA 2010 which takes that form;
and “*double taxation arrangements*” here means arrangements which have effect under section 2(1) of that Act (double taxation relief by agreement with territories outside the United Kingdom).
##### 444BC
- (1) The Treasury may by regulations make provision modifying the operation of section 444BA in relation to cases where an insurance company has, for the purpose of preparing the documents it is required to prepare for the purposes of section 9.3 of the Prudential Sourcebook (Insurers), applied for any period an accounting method described in paragraphs 57 to 59 in Section E of Part 2 of Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (accounting on a non-annual basis).
- (2) Subsection (5) of section 444BB applies for the purposes of this section as it applies for the purposes of that section.
##### 444BD
- (1) The Treasury may by regulations provide for section 444BA to have effect, in such cases and subject to such modifications as may be specified in the regulations, in relation to any equivalent reserves as it has effect in relation to equalisation reserves maintained by virtue of equalisation reserve rules.
- (2) For the purposes of this section a reserve is an equivalent reserve if—
- (a) it is maintained, otherwise than by virtue of equalisation reserve rules, either—
- (i) by an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (ii) by a firm which has permission under paragraph 4 of Schedule 4 to that Act (as a result of qualifying for authorisation under paragraph 2 of that Schedule) to effect or carry out contracts of insurance in the United Kingdom, or
- (iii) in respect of any business which consists of the effecting or carrying out of contracts of insurance and which is carried on outside the United Kingdom by a company resident in the United Kingdom;
- (b) the purpose for which, or the manner in which, it is maintained is such as to make it equivalent to an equalisation reserve maintained by virtue of equalisation reserve rules.
- (3) For the purposes of this section a reserve is also an equivalent reserve if it is maintained in respect of any credit insurance business in accordance with requirements imposed either—
- (a) by or under any enactment, or
- (b) under so much of the law of any territory as secures compliance with the requirements of Article 1 of the credit insurance directive (equalisation reserves for credit insurance).
- (4) Without prejudice to the generality of subsection (1) above, the modifications made by virtue of that subsection may—
- (a) provide for section 444BA to apply in the case of an equivalent reserve only where such conditions as may be specified in the regulations are satisfied in relation to the company maintaining the reserve or in relation to transfers made into or out of it; and
- (b) contain any other provision corresponding to any provision which, in the case of a reserve maintained by virtue of equalisation reserve rules, may be made under sections 444BA to 444BC.
- (5) Subsections (4) and (5) of section 444BB shall apply for the purposes of this section as they apply for the purposes of that section.
- (6) Without prejudice to the generality of section 444BB(5), the transitional provision which by virtue of subsection (5) above may be contained in regulations under this section shall include—
- (a) provision for treating the amount of any transfers made into or out of an equivalent reserve in respect of business carried on for any specified period as increased by the amount by which they would have been increased if no transfers into the reserve had been made in respect of business carried on for an earlier period; and
- (b) provision for excluding from the rule in section 444BA(2)(b) so much of any amount transferred out of an equivalent reserve as represents, in pursuance of an apportionment made under the regulations, the transfer out of that reserve of amounts in respect of which there has been no entitlement to relief by virtue of section 444BA(2)(a).
- (7) In this section—
- “credit insurance business” means business which consists of the effecting or carrying out of contracts of insurance against risks of loss to the persons insured arising from—the insolvency of debtors of theirs, orfrom the failure (otherwise than through insolvency) of debtors of theirs to pay their debts when due;
- “*the credit insurance directive*” means Council Directive [87/343/EEC](https://www.legislation.gov.uk/european/directive/1987/0343) of 22nd June 1987 amending, as regards credit insurance and suretyship insurance, First Directive 73/239 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance; . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 458A
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##### 461A
- (1) For the purposes of sections 461B and 461C, a “*qualifying society*” is an incorporated friendly society which—
- (a) immediately before its incorporation, was a registered friendly society to which section 461(2) did not apply,
- (b) was formed otherwise than by the incorporation of a registered friendly society or the amalgamation of two or more friendly societies and satisfies subsection (2) below, or
- (c) was formed by the amalgamation of two or more friendly societies and satisfies subsection (3) below,
and in respect of which no direction under section 461C(5) is in force.
- (2) A society satisfies this subsection if its business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of this section by the Board.
- (3) If at the time of the amalgamation referred to in subsection (1)(c) above—
- (a) section 461(2) applied to none of the registered friendly societies being amalgamated (if any), and
- (b) all of the incorporated friendly societies being amalgamated (if any) were qualifying societies,
the society formed by the amalgamation satisfies this subsection.
- (4) For the purposes of this section and section 461C, any group of persons which was approved for the purposes of this section (as mentioned in subsection (2) above) by the Friendly Societies Commission immediately before 1st December 2001 shall be treated as having been approved for the purposes of this section by the Board on that date.
##### 461B
- (1) Subject to the following provisions of this section, a qualifying society shall, on making a claim, be entitled to exemption from . . . corporation tax (whether on income or chargeable gains) on its profits other than those arising from life or endowment business.
- (2) Subsection (1) above shall not apply to any profits arising or accruing to the society from, or by reason of its interest in, a body corporate which is a subsidiary (within the meaning of the Friendly Societies Act 1992) of the society or of which the society has joint control (within the meaning of that Act).
- (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) If an incorporated friendly society which is not a qualifying society makes a payment to a member in respect of his interest in the society and the payment is made otherwise than in the course of life or endowment business and exceeds the aggregate of any sums paid by him to the society by way of contributions or deposits, after deducting from that aggregate the amount of—
- (a) any previous payment so made to him by the society, and
- (b) any earlier repayment of such sums paid by him,
the excess shall be treated for the purposes of corporation tax and income tax as a qualifying distribution.
- (4) In relation to an incorporated friendly society which, immediately before its incorporation, was a registered friendly society to which section 461(2) applied—
- (a) the references in subsection (3) above to sums paid to the society shall include sums paid to the registered friendly society,
- (b) the reference in subsection (3)(a) above to any payment made by the society shall include any payment made by the registered friendly society after 26 March 1974 or such later date as was specified in any direction under section 461 (7) relating to it, and
- (c) the reference in subsection (3)(b) above to any repayment shall include any repayment made by the registered friendly society.
- (5) Where a qualifying society at any time ceases by virtue of section 91 of the Friendly Societies Act 1992 (conversion into company) to be registered under that Act, the company into which the society is converted shall be exempt from . . . corporation tax on its profits arising from any part of its business, other than life or endowment business, which relates to contracts made before that time.
- (6) But if during an accounting period of the company there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on any such part of its business, the company shall not be exempt from corporation tax by virtue of subsection (5) above for that or any subsequent accounting period.
- (6A) Where—
- (a) at any time an insurance company acquires by way of transfer of engagements from a qualifying society any business other than life or endowment business, and
- (b) immediately before that time the society was exempt from corporation tax on profits arising from that business,
the insurance company shall be exempt from corporation tax on its profits arising from any part of that business which relates to contracts made before that time.
- (6B) But if during an accounting period of the insurance company there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on any such part of that business, the company shall not be exempt from corporation tax by virtue of subsection (6A) above for that or any subsequent accounting period.
- (7) Any part of a company’s business to which an exemption under subsection (5) or (6A) above relates shall be treated for the purposes of the Corporation Tax Acts as a separate business from any other business carried on by the company.
- (8) 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 (5) or (6A) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (9) Regulations under subsection (8) 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.
##### 461C
- (1) Subject to subsection (2) below, subsections (3) and (4) below apply where a qualifying society—
- (a) begins to carry on business other than life or endowment business, or
- (b) in the opinion of the Board, begins to carry on business other than life or endowment business on an enlarged scale or of a new character.
- (2) Subsections (3) and (4) below do not apply if—
- (a) the society’s business is limited to the provision, in accordance with the rules of the society, of benefits for or in respect of employees of a particular employer or such other group of persons as is for the time being approved for the purposes of section 461 or 461A by the Board, or
- (b) the society’s rules limit the aggregate amount which may be paid by a member by way of contributions and deposits to not more than £1 per month or such greater amount as is authorised for the purposes of section 461.
- (3) If it appears to the Board, having regard to the restrictions imposed by section 461 on registered friendly societies registered after 31st May 1973, that for the protection of the revenue it is expedient to do so, the Board may give a direction to the society under subsection (4) below.
- (4) A direction under this subsection is that (and has the effect that) the society to which it is given shall cease to be a qualifying society as from the date of the direction.
- (5) A society to which a direction is given may, within 30 days of the date on which it is given, appeal against the direction . . . on the ground that—
- (a) it has not begun to carry on business as mentioned in subsection (1) above;
- (b) subsections (3) and (4) above do not apply to it by reason of subsection (2) above; or
- (c) the direction is not necessary for the protection of the revenue.
##### 461D
- (1) Where—
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was exempt from corporation tax on profits arising from that business,
the transferee is so exempt after that time.
- (2) But if during an accounting period of the transferee there is an increase in the scale of benefits which it undertakes to provide in the course of carrying on that business, the transferee shall not be exempt from corporation tax by virtue of subsection (1) above for that or any subsequent accounting period.
- (3) Where—
- (a) at any time a friendly society (“*the transferee*”) acquires by way of transfer of engagements or amalgamation from another friendly society (“*the transferor*”) any business, other than life or endowment business, consisting of business which relates to contracts made before that time, and
- (b) immediately before that time the transferor was not exempt from corporation tax on profits arising from that business,
the transferee is not so exempt after that time.
- (4) The Treasury may by regulations provide that, where any business of a friendly society is exempt from corporation tax by virtue of subsection (1) above, or not so exempt by virtue of subsection (3) above, the Corporation Tax Acts have effect subject to such modifications (or exceptions) as the Treasury consider appropriate.
- (5) Regulations under subsection (4) 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.
##### 462A
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#### Assessment, recovery and postponement of supplementary charge
##### 465A
- (1) This section applies where any assets of a branch of a registered friendly society have been identified in a scheme under section 6(5) of the Friendly Societies Act 1992 (property, rights etc. excluded from transfer to the society on its incorporation).
- (2) In relation to any time after the incorporation of the society, the assets shall be treated for the purposes of the Tax Acts as assets of the society (and, accordingly, any tax liability arising in respect of them shall be a liability of the society rather than of the branch).
- (3) Where, by virtue of this section, tax in respect of any of the assets becomes chargeable on and is paid by the society, the society may recover from the trustees in whom those assets are vested the amount of the tax paid.
##### 468AA
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##### 468A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits following an exempt period
##### 468C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 751A and 751AA: supplementary
##### 468EE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Distributions of authorised unit trusts: general
##### 468H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Dividend and foreign income distributions
##### 468J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Interest distributions
##### 468L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Charitable and non-charitable expenditure
##### 468M
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468N
- (1) Subsection (2) below applies where—
- (a) an interest distribution is made for a distribution period to a unit holder; and
- (b) the gross income entered in the distribution accounts for the purposes of computing the total amount available for distribution to unit holders does not derive from eligible income entirely.
- (2) Where this subsection applies, the obligation to deduct under section 349(2) shall not apply to the relevant amount of the interest distribution to the unit holder if the residence condition is on the distribution date fulfilled with respect to him.
- (3) Section 468O makes provision with respect to the circumstances in which the residence condition is fulfilled with respect to a unit holder.
- (4) This is how to calculate the relevant amount of the interest distribution—
$$R=AxBC$Where—R = the relevant amount;A = the amount of the interest distribution before deduction of tax to the unit holder in question;B = such amount of the gross income as derives from eligible income;C = the amount of the gross income.$
- (5) In subsection (4) above the references to the gross income are references to the gross income entered as mentioned in subsection (1)(b) above.
##### 468O
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468P
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468PA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468PB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Distributions to corporate unit holder
##### 468Q
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468R
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 469A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 472A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 477A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 477B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 480A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 480B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionment of chargeable profits and creditable tax
##### 480C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### General definition of offshore fund
##### 482A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### PETROLEUM EXTRACTION ACTIVITIES
##### 494AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 494A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 496A
Schedule 19B to this Act (exploration expenditure supplement) shall have effect.
##### 496B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company with investment business: deductions generally
##### 501A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 501B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Chapter 5A — Special rules for long funding leases of plant or machinery: corporation tax
### Introductory
##### 502A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessors under long funding finance leases
##### 502B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessors under long funding operating leases
##### 502E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessors under long funding finance or operating leases: avoidance etc
#### Tariff receipts and tax-exempt tariffing receipts
##### 502GA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502GB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502GC
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502GD
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Insurance company as lessor
##### 502H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessees under long funding finance leases
#### Introductory.
##### 502I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 502J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Lessees under long funding operating leases
##### 502K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Interpretation of Chapter
##### 502L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 504A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure.
#### Old societies.
##### 506A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 506B
- (1) Section 506A shall not apply to a transaction within section 506A(1)(b) or (d) if the Commissioners for Her Majesty's Revenue and Customs determine that the transaction—
- (a) takes place in the course of a business carried on by the substantial donor,
- (b) is on terms which are no less beneficial to the charitable company than those which might be expected in a transaction at arm's length, and
- (c) is not part of an arrangement for the avoidance of any tax.
- (2) Section 506A shall not apply to the provision of services to a substantial donor if the Commissioners determine that the services are provided—
- (a) in the course of the actual carrying out of a primary purpose of the charitable company, and
- (b) on terms which are no more beneficial to the substantial donor than those on which services are provided to others.
- (3) Section 506A shall not apply to the provision of financial assistance to a charitable company by a substantial donor if the Commissioners determine that the assistance—
- (a) is on terms which are no less beneficial to the charitable company than those which might be expected in a transaction at arm's length, and
- (b) is not part of an arrangement for the avoidance of any tax.
- (4) Section 506A shall not apply to investment by a charitable company in the business of a substantial donor where the investment takes the form of the purchase of shares or securities listed on a recognised stock exchange.
- (5) A disposal at an undervalue in respect of which relief is available under section 587B of this Act or section 431 of ITA 2007 (gifts of shares, securities and real property to charities etc) shall not be a transaction to which section 506A applies (but may be taken into account in the application of section 506A(2)).
- (6) A disposal at an undervalue to which section 257(2) of the 1992 Act (gifts of chargeable assets) applies shall not be a transaction to which section 506A applies (but may be taken into account in the application of section 506A(2)).
- (7) In the application of section 506A payments by a charitable company, or benefits arising to a substantial donor from a transaction, shall be disregarded in so far as they relate to a donation by the donor, and—
- (a) if the donation is made by a company, the payments or benefits do not prevent the donation being a qualifying donation for the purposes of section 339 because of subsection (3B)(b) of that section (restrictions on associated benefits), or
- (b) if the donation is made by an individual, the payments or benefits do not prevent the donation being a qualifying donation for the purposes of section 416 of ITA 2007 because of subsection (7)(b) of that section (restrictions on associated benefits).
- (8) A company which is wholly owned by a charity within the meaning of section 339(7AB) shall not be treated as a substantial donor in relation to a charitable company which owns it (or any part of it).
- (9) A relevant housing provider shall not be treated as a substantial donor in relation to a charitable company with which it is connected; and for that purpose—
- (a) “*relevant housing provider*” means a body which is a non-profit registered provider of social housing or which is entered on a register maintained under—
- (i) section 1 of the Housing Act 1996,
- (ii) section 57 of the Housing (Scotland) Act 2001, or
- (iii) Article 14 of the Housing (Northern Ireland) Order 1992, and
- (b) a body and a charitable company are connected if (and only if)—
- (i) the one is wholly owned, or subject to control, by the other, or
- (ii) both are wholly owned, or subject to control, by the same person.
##### 506C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Eligibility for relief.
##### 508A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 508B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 510A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 519A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Information: supplementary provisions
#### Information: supplementary provisions
#### Non-resident policies and off-shore capital redemption policies.
#### Relief by agreement with other territories.
#### Recovery of tax credits incorrectly paid.
### Designs
##### 537A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 537B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The qualifying subsidiaries requirement
##### 539ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 539A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Relief for individuals.
##### 546A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 546B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 546C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 546D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 547A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 548A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Arrangements to avoid section 812.
##### 548B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 551A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 552ZA
- (1) This section supplements section 552 and shall be construed as one with it.
- (2) Where the obligations under any policy or contract of the body that issued, entered into or effected it (“*the original insurer*”) are at any time the obligations of another body (“*the transferee*”) to whom there has been a transfer of the whole or any part of a business previously carried on by the original insurer, section 552 shall have effect in relation to that time, except where the chargeable event—
- (a) happened before the transfer, and
- (b) in the case of a death or an assignment, is an event of which the notification mentioned in subsection (6) or (7) of that section was given before the transfer,
as if the policy or contract had been issued, entered into or effected by the transferee.
- (3) Where, in consequence of . . . section 514(1) of ITTOIA 2005, paragraph (a) or (b) of section 552(1) requires certificates to be delivered in respect of two or more surrenders, happening in the same year, of part of or a share in the rights conferred by the policy or contract, a single certificate may be delivered under the paragraph in question in respect of all those surrenders (and may treat them as if they together constituted a single surrender) unless between the happening of the first and the happening of the last of them there has been—
- (a) an assignment of part of or a share in the rights conferred by the policy or contract; or
- (b) an assignment, otherwise than for money or money’s worth, of the whole of the rights conferred by the policy or contract.
- (4) Where the appropriate policy holder is two or more persons—
- (a) section 552(1)(a) requires a certificate to be delivered to each of them; but
- (b) nothing in section 552 or this section requires a body to deliver a certificate under subsection (1)(a) of that section to any person whose address has not been provided to the body (or to another body, at a time when the obligations under the policy or contract were obligations of that other body).
- (5) A certificate under section 552(1)(b) or (3)—
- (a) shall be in a form prescribed for the purpose by the Board; and
- (b) shall be delivered by any means prescribed for the purpose by the Board;
and different forms, or different means of delivery, may be prescribed for different cases or different purposes.
- (6) The Board may by regulations make such provision as they think fit for securing that they are able—
- (a) to ascertain whether there has been or is likely to be any contravention of the requirements of section 552 or this section; and
- (b) to verify any certificate under that section.
- (7) Regulations under subsection (6) above may include, in particular, provisions requiring persons to whom premiums under any policy are or have at any time been payable—
- (a) to supply information to the Board; and
- (b) to make available books, documents and other records for inspection on behalf of the Board.
- (8) Regulations under subsection (6) above may—
- (a) make different provision for different cases; and
- (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.
##### 552ZB
- (1) The Commissioners for Her Majesty's Revenue and Customs may make regulations—
- (a) requiring relevant persons—
- (i) to provide prescribed information to persons who apply for the issue of qualifying policies or who are, or may be, required to make statements under paragraph B3(2) of Schedule 15;
- (ii) to provide to an officer of Revenue and Customs prescribed information about qualifying policies which have been issued by them or in relation to which they are or have been a relevant transferee;
- (b) making such provision (not falling within paragraph (a)) as the Commissioners think fit for securing that an officer of Revenue and Customs is able—
- (i) to ascertain whether there has been or is likely to be any contravention of the requirements of the regulations or of paragraph B3(2) of Schedule 15;
- (ii) to verify any information provided to an officer of Revenue and Customs as required by the regulations.
- (2) The provision that may be made by virtue of subsection (1)(b) includes, in particular, provision requiring relevant persons to make available books, documents and other records for inspection by or on behalf of an officer of Revenue and Customs.
- (3) The regulations may—
- (a) make different provision for different cases or circumstances, and
- (b) contain incidental, supplementary, consequential, transitional, transitory or saving provision.
- (4) In this section—
- “*prescribed*” means prescribed by the regulations,
- “*qualifying policy*” includes a policy which would be a qualifying policy apart from—paragraph A1(2), B1(2), B2(2) or B3(3) of Schedule 15, orparagraph 17(2)(za) of that Schedule (including as applied by paragraph 18), and
- “*relevant person*” means a person—who issues, or has issued, qualifying policies, orwho is, or has been, a relevant transferee in relation to qualifying policies.
- (5) For the purposes of this section a person (“X”) is at any time a “*relevant transferee*” in relation to a qualifying policy if the obligations under the policy of its issuer are at that time the obligations of X as a result of there having been a transfer to X of the whole or any part of a business previously carried on by the issuer.
##### 552A
- (1) This section has effect for the purpose of securing that, where it applies to an overseas insurer, another person is the overseas insurer’s tax representative.
- (2) In this section “*overseas insurer*” means a person who is not resident in the United Kingdom who carries on a business which consists of or includes the effecting and carrying out of—
- (a) policies of life insurance;
- (b) contracts for life annuities; or
- (c) capital redemption policies.
- (3) This section applies to an overseas insurer—
- (a) if the condition in subsection (4) below is satisfied on the designated day; or
- (b) where that condition is not satisfied on that day, if it has subsequently become satisfied.
- (4) The condition mentioned in subsection (3) above is that—
- (a) there are in force relevant insurances the obligations under which are obligations of the overseas insurer in question or of an overseas insurer connected with him; and
- (b) the total amount or value of the gross premiums paid under those relevant insurances is £1 million or more.
- (5) In this section “*relevant insurance*” means any policy of life insurance, contract for a life annuity or capital redemption policy . . . in the case of which—
- (a) the holder is resident in the United Kingdom;
- (b) the obligations of the insurer are obligations of a person not resident in the United Kingdom; and
- (c) those obligations are not attributable to a branch or agency of that person’s in the United Kingdom.
- (6) Before the expiration of the period of three months following the day on which this section first applies to an overseas insurer, the overseas insurer must nominate to the Board a person to be his tax representative.
- (7) A person shall not be a tax representative unless—
- (a) if he is an individual, he is resident in the United Kingdom and has a fixed place of residence there, or
- (b) if he is not an individual, he has a business establishment in the United Kingdom,
and, in either case, he satisfies such other requirements (if any) as are prescribed in regulations made for the purpose by the Board.
- (8) A person shall not be an overseas insurer’s tax representative unless—
- (a) his nomination by the overseas insurer has been approved by the Board; or
- (b) he has been appointed by the Board.
- (9) The Board may by regulations make provision supplementing this section; and the provision that may be made by any such regulations includes provision with respect to—
- (a) the making of a nomination by an overseas insurer of a person to be his tax representative;
- (b) the information which is to be provided in connection with such a nomination;
- (c) the form in which such a nomination is to be made;
- (d) the powers and duties of the Board in relation to such a nomination;
- (e) the procedure for approving, or refusing to approve, such a nomination, and any time limits applicable to doing so;
- (f) the termination, by the overseas insurer or the Board, of a person’s appointment as a tax representative;
- (g) the appointment by the Board of a person as the tax representative of an overseas insurer (including the circumstances in which such an appointment may be made);
- (h) the nomination by the overseas insurer, or the appointment by the Board, of a person to be the tax representative of an overseas insurer in place of a person ceasing to be his tax representative;
- (j) circumstances in which an overseas insurer to whom this section applies may, with the Board’s agreement, be released (subject to any conditions imposed by the Board) from the requirement that there must be a tax representative;
- (k) appeals to the tribunal against decisions of the Board under this section or regulations under it.
- (10) The provision that may be made by regulations under subsection (9) above also includes provision for or in connection with the making of other arrangements between the Board and an overseas insurer for the purpose of securing the discharge by or on behalf of the overseas insurer of the relevant duties, within the meaning of section 552B.
- (11) Section 1122 of CTA 2010 (connected persons) applies for the purposes of this section.
- (12) In this section—
- “*capital redemption policy*” means a capital redemption policy in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect;
- “*contract for a life annuity*” means a contract for a life annuity in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect;
- “*the designated day*” means such day as the Board may specify for the purpose in regulations;
- “*policy of life insurance*” means a policy of life insurance in relation to which . . . Chapter 9 of Part 4 of ITTOIA 2005 has effect;
- “*tax representative*” means a tax representative under this section.
##### 552B
- (1) It shall be the duty of an overseas insurer’s tax representative to secure (where appropriate by acting on the overseas insurer’s behalf) that the relevant duties are discharged by or on behalf of the overseas insurer.
- (2) For the purposes of this section “*the relevant duties*” are—
- (a) the duties imposed by section 552,
- (b) the duties imposed by section 552ZA(2), (4) or (5), and
- (c) any duties imposed by regulations made under subsection (6) of section 552ZA by virtue of subsection (7) of that section,
so far as relating to relevant insurances under which the overseas insurer in question has any obligations.
- (3) An overseas insurer’s tax representative shall be personally liable—
- (a) in respect of any failure to secure the discharge of the relevant duties, and
- (b) in respect of anything done for purposes connected with acting on the overseas insurer’s behalf,
as if the relevant duties were imposed jointly and severally on the tax representative and the overseas insurer.
- (4) In the application of this section in relation to any particular tax representative, it is immaterial whether any particular relevant duty arose before or after his appointment.
- (5) This section has effect in relation to relevant duties relating to chargeable events happening on or after the day by which section 552A(6) requires the nomination of the overseas insurer’s first tax representative to be made.
- (5A) In subsection (5) “*chargeable event*” has the same meaning as in section 552 (see subsection (10) of that section).
- (6) Expressions used in this section and in section 552A have the same meaning in this section as they have in that section.
##### 553A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 553B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 553C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 559A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Cessation of approval: general provisions.
### Chapter 5A — Share loss relief
### Relief for losses on unquoted shares in trading companies
##### 576A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Qualifying trading companies: the requirements
##### 576B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Cessation of approval: tax on certain schemes.
##### 576C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Termination of relief under this Chapter, and transitional provisions.
##### 576E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576H
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576I
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Qualifying trading companies: supplementary provisions
##### 576J
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 576K
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplemental
##### 576L
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Definition of insurance company.
##### 577A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 578A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 578B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 580C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Repayment supplements: companies.
##### 581A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 582A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on payments in respect of corporation tax and meaning of “the material date".
##### 587A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 587B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 587BA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 587C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts etc.
##### 589A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 589B
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commencement.
##### 590A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 590B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 590C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 591D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Income arising under settlement where settlor retains an interest.
##### 596A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 596B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 596C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 599A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 605A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 606A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 611A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 611AA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 611A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 617A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Revocable settlements allowing release of obligation.
#### Settlements made after 6th April 1965.
##### 631A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 632B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 634A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 636A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 637A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 638A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Settlements made after 6th April 1965.
##### 640A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 641A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Schedule 4 directions.
#### Interpretation.
##### 646A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 646D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Annuities: charge to tax
##### 648A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 648B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 650A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 651A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 653A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 658A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659A
- (1) For the purposes of sections . . . 613(4), 614(3) and (4) . . . —
- (a) “*investments*” (or “*investment*”) includes futures contracts and options contracts, and
- (b) income derived from transactions relating to such contracts shall be regarded as income derived from (or income from) such contracts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of subsection (1) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.
##### 659B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 659E
- (1) The exemptions specified below do not apply to income derived from investments, deposits or other property held as a member of a property investment LLP (see section 1004 of ITA 2007).
- (2) The exemptions are those provided by—
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- section 613(4) (Parliamentary pension funds),
- section 614(3) (certain colonial, &c. pension funds),
- section 614(4) (the Overseas Service Pension Fund),
- section 614(5) (other pension funds for overseas employees),
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) The income to which subsection (1) above applies includes relevant stock lending fees, in relation to any investments, to which any of the provisions listed in subsection (2) above would apply by virtue of section 129B.
- (4) Section 659A (treatment of futures and options) applies for the purposes of subsection (1) above.
### Chapter IA — Liability of settlor
### Main provisions
- “*general insurance business*” has the same meaning as in section 755B;
- “*non-resident company*” means a company resident outside the United Kingdom;
- “*prescribed*” means prescribed in regulations under this section.
##### 755D
- (1) For the purposes of this Chapter “control", in relation to a company, means the power of a person to secure—
- (a) by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or
- (b) by virtue of any powers conferred by the articles of association or other document regulating the company or any other company,
that the affairs of the company are conducted in accordance with his wishes.
- (1A) For the purposes of this Chapter a person also controls a company if the person possesses, or is entitled to acquire, such rights as would—
- (a) if the whole of the income of the company were distributed, entitle the person to receive the greater part of the amount so distributed,
- (b) if the whole of the company's share capital were disposed of, entitle the person to receive the greater part of the proceeds of the disposal, or
- (c) in the event of the winding-up of the company or in any other circumstances, entitle the person to receive the greater part of the assets of the company which would then be available for distribution.
- (2) Where two or more persons, taken together, have the power mentioned in subsection (1) above or satisfy subsection (1A) above, they shall be taken for the purposes of this Chapter to control the company.
- (3) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing at least 40 per cent of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (4) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing—
- (a) at least 40 per cent, but
- (b) not more than 55 per cent,
of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (5) For the purposes of this Chapter any question—
- (a) whether a company is controlled by a person, or by two or more persons taken together, or
- (b) whether, in the case of any company, the applicable 40 per cent test is satisfied in the case of each of two persons who, taken together, control the company,
shall be determined after attributing to each of the persons all the rights and powers mentioned in subsection (6) below that are not already attributed to that person for the purposes of subsections (1) to (4) above.
- (6) The rights and powers referred to in subsection (5) above are—
- (a) rights and powers which the person is entitled to acquire at a future date or which he will, at a future date, become entitled to acquire;
- (b) rights and powers of other persons, to the extent that they are rights or powers falling within subsection (7) below;
- (c) if the person is resident in the United Kingdom, rights and powers of any person who is resident in the United Kingdom and connected with the person; and
- (d) if the person is resident in the United Kingdom, rights and powers which for the purposes of subsection (5) above would be attributed to a person who is resident in the United Kingdom and connected with the person (a “*UK connected person*”) if the UK connected person were himself the person.
- (7) Rights and powers fall within this subsection to the extent that they—
- (a) are required, or may be required, to be exercised in any one or more of the following ways, that is to say—
- (i) on behalf of the person;
- (ii) under the direction of the person; or
- (iii) for the benefit of the person; and
- (b) are not confined, in a case where a loan has been made by one person to another, to rights and powers conferred in relation to property of the borrower by the terms of any security relating to the loan.
- (8) In subsections (6)(b) to (d) and (7) above, the references to a person’s rights and powers include references to any rights or powers which he either—
- (a) is entitled to acquire at a future date, or
- (b) will, at a future date, become entitled to acquire.
- (9) In paragraph (d) of subsection (6) above, the reference to rights and powers which would be attributed to a UK connected person if he were the person includes a reference to rights and powers which, by applying that paragraph wherever one person resident in the United Kingdom is connected with another person, would be so attributed to him through a number of persons each of whom is resident in the United Kingdom and connected with at least one of the others.
- (10) In determining for the purposes of this section whether one person is connected with another in relation to a company, section 1122(4) of CTA 2010 shall be disregarded.
- (11) References in this section—
- (a) to rights and powers of a person, or
- (b) to rights and powers which a person is or will become entitled to acquire,
include references to rights or powers which are exercisable by that person, or (when acquired by that person) will be exercisable, only jointly with one or more other persons.
### Meaning of offshore fund
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660C
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Supplementary provisions
##### 660E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 660G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 674A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Appeals against Board’s notices under section 703.
#### Reduction in chargeable profits for certain financing income
##### 682A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### . . .
### . . .
##### 685A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits for certain financing income
##### 685F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 685G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits: failure to qualify for exemptions
##### 686A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 686D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
##### 686E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 687A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Chapter ID — Trust management expenses
##### 689A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 689B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 698A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 699A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 751A and 751AA: supplementary
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 705A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 705B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Apportionment of chargeable profits and creditable tax
#### General definition of offshore fund
#### Deductions: asset transferred within group.
##### 722A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company carrying on property business.
##### 726A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 727A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provision not at arm’s length.
##### 730A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 730B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 730BB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 730C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 774B and 774D: exceptions
##### 736A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 774B and 774D: exceptions
##### 736B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 736C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 736D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sections 774A to 774D: minor definitions etc
##### 737A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 737E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 741D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfers of rights to receive annual payments
##### 747A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 748ZA
- (1) Nothing in section 748(1)(da) prevents an apportionment falling to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company (“X”) if condition A, B or C is met.
- (2) Condition A is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in the absence of this subsection, in consequence of the scheme, section 748(1)(da) would apply to prevent an apportionment falling to be made as regards the relevant accounting period of X, and
- (b) the main purpose, or one of the main purposes, of any party to the scheme in entering into the scheme is to secure that section 748(1)(da) prevents an apportionment falling to be made as regards that period, or that period and one or more other accounting periods of X.
- (3) Condition B is that at any time before the end of the relevant accounting period a scheme is entered into and—
- (a) in consequence of the scheme profits are shifted to X from another company (“Y”),
- (b) the main purpose or one of the main purposes of any party to the scheme in entering into the scheme is to ensure that section 748(1)(da) prevents an apportionment falling to be made as regards the chargeable profits of one or more controlled foreign companies for one or more accounting periods, and
- (c) the relevant accounting period of X falls wholly or partly within that accounting period or those accounting periods.
- (4) For the purposes of subsection (3), profits are shifted to X from Y if it is reasonable to suppose that in the absence of the scheme, and any similar scheme, the whole or a part of the income which is reflected in X's profits would have been reflected in Y's profits.
- (5) Condition C is that, in determining X's chargeable profits for the relevant accounting period—
- (a) section 418(5) of CTA 2009 (loan relationships involving connected debtor and creditor where debits exceed credits) has effect so as to treat X, for the purposes of Part 5 of that Act, as bringing into account for that period credits in respect of a loan relationship, or
- (b) Part 21B of CTA 2010 (group mismatch schemes) has effect so as to exclude an amount from being brought into account as a debit or credit for the purposes of Part 5 of CTA 2009 (loan relationships) or Part 7 of that Act (derivative contracts).
- (6) For the purposes of this section—
- “*apportionment*” means an apportionment under section 747(3);
- “*scheme*” means any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving one or more transactions.
##### 748A
- (1) Nothing in section 748 prevents an apportionment under section 747(3) falling to be made as regards an accounting period of a controlled foreign company if the company—
- (a) is a company incorporated in a territory to which this section applies as respects that accounting period; or
- (b) is at any time in that accounting period liable to tax in such a territory by reason of domicile, residence or place of management; or
- (c) at any time in that accounting period carries on business through a permanent establishment in such a territory.
- (2) The condition in subsection (1)(c) above is not satisfied as regards an accounting period of a controlled foreign company if the business carried on by the company in that period through permanent establishments in territories to which this section applies, taken as a whole, is only a minimal part of the whole of the business carried on by the company in that period.
- (3) The territories to which this section applies as respects an accounting period of a controlled foreign company are those specified as such in regulations made by the Treasury.
- (4) Regulations under subsection (3) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such incidental, supplemental, consequential or transitional provision as the Treasury may think fit.
- (5) A statutory instrument containing regulations under subsection (3) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
##### 749A
- (1) An election under paragraph (d) or a designation under paragraph (e) of section 749(3) shall have effect in relation to—
- (a) the accounting period in relation to which it is made (“the original accounting period"), and
- (b) each successive accounting period of the controlled foreign company in question which precedes the next one in which the eligible territories are different,
and shall so have effect notwithstanding any change in the persons who have interests in the company or any change in the interests which those persons have in the company.
- (2) For the purposes of subsection (1)(b) above, an accounting period of the controlled foreign company is one in which the eligible territories are different if in the case of that accounting period—
- (a) at least one of the two or more territories which fell within subsection (1) of section 749 in the original accounting period does not fall within that subsection; or
- (b) some other territory also falls within that subsection.
- (3) Any election under section 749(3)(d)—
- (a) must be made by notice given to an officer of the Board;
- (b) must be made no later than twelve months after the end of the controlled foreign company’s accounting period in relation to which it is made;
- (c) must state, as respects each of the persons making it, the percentage of the chargeable profits and creditable tax (if any) of the controlled foreign company for that accounting period which it is likely would be apportioned to him on an apportionment under section 747(3) if one were made;
- (d) must be signed by the persons making it; and
- (e) is irrevocable.
- (4) Nothing in—
- (a) paragraph 10 of Schedule 18 to the Finance Act 1998 (claims or elections in company tax returns), or
- (b) Schedule 1A to the Management Act (claims or elections not included in returns),
shall apply, whether by virtue of section 754 or otherwise, to an election under section 749(3)(d).
- (5) A designation under section 749(3)(e) is irrevocable.
- (6) Where the Board make a designation under section 749(3)(e), notice of the making of the designation shall be given to every company resident in the United Kingdom which appears to the Board to have had an assessable interest in the controlled foreign company at any time during the accounting period of the controlled foreign company in relation to which the designation is made.
- (7) A notice under subsection (6) above shall specify—
- (a) the date on which the designation was made;
- (b) the controlled foreign company to which the designation relates;
- (c) the accounting period of the controlled foreign company in relation to which the designation is made; and
- (d) the territory designated.
- (8) Subsection (9) of section 749 has effect for the purposes of subsection (6) above as it has effect for the purposes of subsection (8) of that section.
- (9) For the purposes of this section the effect of any application under section 751A or 751AA shall be disregarded.
##### 749B
- (1) For the purposes of this Chapter, the following persons have an interest in a company—
- (a) any person who possesses, or is entitled to acquire, share capital or voting rights in the company;
- (b) any person who possesses, or is entitled to acquire, a right to receive or participate in distributions of the company;
- (c) any person who is entitled to secure that income or assets (whether present or future) of the company will be applied directly or indirectly for his benefit; and
- (d) any other person who, either alone or together with other persons, has control of the company.
- (2) Rights which a person has as a loan creditor of a company do not constitute an interest in the company for the purposes of this Chapter.
- (3) For the purposes of subsection (1)(b) above, the definition of “distribution" in Part 23 of CTA 2010 shall be construed without any limitation to companies resident in the United Kingdom.
- (4) References in subsection (1) above to being entitled to do anything apply where a person—
- (a) is presently entitled to do it at a future date, or
- (b) will at a future date be entitled to do it;
but a person whose entitlement to secure that any income or assets of the company will be applied as mentioned in paragraph (c) of that subsection is contingent upon a default of the company or any other person under any agreement shall not be treated as falling within that paragraph unless the default has occurred.
- (5) Where a company has an interest in another company and a third person has, or two or more persons together have, an interest in the first company (as in a case where one company has a shareholding in a controlled foreign company and the first company is controlled by a third company or by two or more persons together) subsections (6) and (7) below apply.
- (6) Where this subsection applies, the person who has, or each of the persons who together have, the interest in the first company shall be regarded for the purposes of this Chapter as thereby having an interest in the second company.
- (7) In any case where this subsection applies, in construing references in this Chapter to one person having the same interest as another, the person or, as the case may be, each of the persons who together have, the interest in the first company shall be treated as having, to the extent of that person’s interest in that company, the same interest as the first company has in the second company.
- (8) Where two or more persons jointly have an interest in a company otherwise than in a fiduciary or representative capacity, they shall be treated for the purposes of this Chapter as having the interest in equal shares.
##### 750A
- (1) Where—
- (a) in any accounting period a company is to be regarded by virtue of any of subsections (1) to (4) of section 749 as resident in a particular territory outside the United Kingdom, and
- (b) within the meaning of section 750(1), the local tax in respect of the profits arising to the company in that accounting period is equal to or greater than three-quarters of the corresponding United Kingdom tax on those profits, but
- (c) that local tax is determined under designer rate tax provisions,
the company shall be taken for the purposes of this Chapter to be subject to a lower level of taxation in that territory in that accounting period.
- (2) In subsection (1) above “*designer rate tax provisions*” means provisions—
- (a) which appear to the Board to be designed to enable companies to exercise significant control over the amount of tax which they pay; and
- (b) which are specified in regulations made by the Board.
- (3) Regulations under subsection (2) above—
- (a) may make different provision for different cases or with respect to different territories; and
- (b) may contain such supplementary, incidental, consequential or transitional provision as the Board may think fit.
- (4) The first regulations under subsection (2) above may make provision having effect in relation to accounting periods beginning not more than fifteen months before the date on which the regulations are made.
##### 751A
- (1) This section applies if—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) throughout that period the controlled foreign company has a business establishment in an EEA territory,
- (c) throughout that period there are individuals who work for the controlled foreign company in that territory, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) those chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in those chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the amount (if any) equal to so much of those chargeable profits as can reasonably be regarded as representing the net economic value which—
- (a) arises to the appropriate body of persons (taken as a whole), and
- (b) is created directly by qualifying work.
- (5) For the purposes of subsection (4) “*net economic value*” does not include any value which derives directly or indirectly from the reduction or elimination of any liability of any person to any tax or duty imposed under the law of any territory.
- (6) For the purposes of subsection (4) “*the appropriate body of persons*” means—
- (a) if the controlled foreign company is not a member of a group of companies, the controlled foreign company and the persons who have an interest in it at any time in the relevant accounting period, and
- (b) if the controlled foreign company is a member of a group of companies, all the persons falling within paragraph (a) and any other person who is a member of that group of companies,
and for the purposes of this subsection “*group of companies*” means a company and any other companies of which it has control.
- (7) For the purposes of subsection (4) “*qualifying work*” means work which—
- (a) is done in any EEA territory in which the controlled foreign company has a business establishment throughout the relevant accounting period, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (8) Any reference in this section to a business establishment of a controlled foreign company in an EEA territory is to be construed in accordance with paragraph 7 of Schedule 25 (but as if the reference in that paragraph to the territory in which the company is resident were to the EEA territory).
- (9) For the purposes of this section individuals are not to be regarded as working for a company in any territory unless—
- (a) they are employed by the company in the territory, or
- (b) they are otherwise directed by the company to perform duties on its behalf in the territory.
#### Leased assets subject to hire-purchase agreements.
##### 751AA
- (1) This section applies if—
- (a) an apportionment under section 747(3) falls to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) the chargeable profits of the controlled foreign company for the relevant accounting period would, apart from this section, include an amount of income in respect of a payment made by another company (“the payer”),
- (c) the amount that the payer brings into account for the purposes of corporation tax in respect of the payment is reduced (in part or in full) by virtue of Part 3 of Schedule 15 to FA 2009 (tax treatment of financing costs and income), and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in the relevant accounting period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced by an amount (“*the specified amount*”) specified in the application (including to nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced by the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if they are satisfied that the specified amount does not exceed the relevant amount.
- (5) In subsection (4) “*the relevant amount*” means the amount (if any) by which it is just and reasonable that the chargeable profits should be treated as reduced, having regard to the effect of Parts 3 and 4 of Schedule 15 to FA 2009 on amounts brought into account for the purposes of corporation tax by the payer, or any other company.
#### Section 785B: expectation that relevant capital payment will not be paid
##### 751AB
- (1) This section applies if—
- (a) an apportionment under section 747(3) would fall to be made as regards an accounting period (“*the relevant accounting period*”) of a controlled foreign company,
- (b) but for a relevant failure, section 748(1)(ba) or (bb) would have prevented such an apportionment, and
- (c) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) “*Relevant failure*” means—
- (a) in the case of section 748(1)(ba), one or both of the following—
- (i) a failure to satisfy the requirement of paragraph 12E of Schedule 25 (requirement as to company's UK connection) in circumstances where the requirement would be satisfied if the reference in sub-paragraph (3)(a) of that paragraph to 10% were a reference to 50%, and
- (ii) a failure to satisfy the requirement of paragraph 12F of that Schedule (finance income and relevant IP income) in circumstances where the relevant IP income of the controlled foreign company for the accounting period does not exceed 5% of the company's gross income for that period, and
- (b) in the case of section 748(1)(bb), a failure to satisfy the requirement of paragraph 12M of that Schedule (finance income).
- (3) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for the relevant accounting period (“the chargeable profits”) to be reduced to an amount specified in the application (“*the specified amount*”).
The specified amount may be nil.
- (4) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (5) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AC.
- (6) “*The relevant amount*” means—
- (a) if the relevant failure is within subsection (2)(a), the sum of—
- (i) the excess finance and IP income (if any) for the relevant accounting period, and
- (ii) in a case where there is a failure specified in subsection (2)(a)(i), so much (if any) of the net chargeable profits for that period as are not excluded by subsection (8), and
- (b) if the relevant failure is within subsection (2)(b)—
- (i) the amount (if any) by which the controlled foreign company's finance income for the relevant accounting period exceeds 5% of its gross income for that period, or
- (ii) if that amount is a negligible amount, nil.
- (7) “The excess finance and IP income” for the relevant accounting period means—
- (a) the amount (if any) by which the total of the controlled foreign company's finance income and relevant IP income for that period exceeds 5% of its gross income for that period, or
- (b) if that amount is a negligible amount, nil.
- (8) Net chargeable profits are excluded by this subsection if, and to the extent that, they can reasonably be regarded—
- (a) as representing the net economic value which—
- (i) arises to the appropriate body of persons (taken as a whole), and
- (ii) is created directly by qualifying work, or
- (b) as not being wholly or partly attributable, directly or indirectly, to transactions with persons within the charge to United Kingdom tax.
- (9) In subsection (8)(a) “*qualifying work*” means work which—
- (a) is done in the territory in which the controlled foreign company is resident, and
- (b) is done in that territory by individuals working for the controlled foreign company there.
- (10) A transaction with a company which is within the charge to United Kingdom tax only because it carries on a trade in the United Kingdom through a permanent establishment there is within subsection (8)(b) only if the transaction is attributable to activities carried on through that establishment.
- (11) For the purposes of subsections (8) and (9)—
- (a) section 751A(5), (6) and (9) applies as it applies for the purposes of the equivalent provisions of section 751A, and
- (b) paragraph 5(2) to (5) of Schedule 25 (residence of controlled foreign company) applies as it applies in relation to Part 2 of that Schedule.
- (12) In this section—
- “*finance income*” has the meaning given by paragraph 12F(3) of Schedule 25 (with references to C read as references to the controlled foreign company);
- “*relevant IP income*” has the meaning given by paragraph 12F(4) of that Schedule;
- “*net chargeable profits*” means chargeable profits excluding so much of those profits as is directly attributable to the finance income or relevant IP income of the controlled foreign company;
- “*UK-connected gross income*” has the same meaning as in paragraph 12E of Schedule 25;
- “*United Kingdom tax*” means corporation tax or income tax;
and paragraph 12G of that Schedule (gross income) applies for the purposes of this section as it applies for the purposes of Part 2A of that Schedule (with references to C read as references to the controlled foreign company).
#### Transactions associated with loans or credit.
##### 751AC
- (1) This section applies if—
- (a) an exempt period in relation to a controlled foreign company ends in accordance with paragraph 15F(2) of Schedule 25 (time exempt period ends if there is an early termination event), other than by reason of an early termination event within paragraph 15F(3)(b),
- (b) an accounting period (“*the relevant accounting period*”) of the company ends after that exempt period but before the time the exempt period would have ended had paragraph 15F(2) of that Schedule not applied,
- (c) an apportionment under section 747(3) would fall to be made as regards the relevant accounting period, and
- (d) a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
- (2) The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for that accounting period (“the chargeable profits”) to be reduced to an amount (“*the specified amount*”) specified in the application (which may be nil).
- (3) If the Commissioners grant the application—
- (a) the chargeable profits are treated as reduced to the specified amount, and
- (b) the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
- (4) The Commissioners may grant the application only if—
- (a) they are satisfied that the specified amount is not less than the relevant amount, and
- (b) they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AB.
- (5) “*The relevant amount*” means the amount (if any) equal to so much of the chargeable profits as it is just and reasonable to regard as referable to—
- (a) the relevant transaction which triggered the end of the exempt period, or
- (b) any later relevant transaction occurring before the time the exempt period would have ended had paragraph 15F(2) of Schedule 25 not applied.
- (6) “*Relevant transaction*” has the meaning given by paragraph 15E of Schedule 25 (and it does not matter if the transaction occurs pursuant to an agreement entered into by the controlled foreign company before the relevant time (within the meaning of paragraph 15G of that Schedule)).
#### Restriction of relief for payments of interest.
##### 751B
- (1) An application by a company under section 751A or 751AA—
- (a) must be made in such form as the HMRC Commissioners may determine,
- (b) must be accompanied by such documents (or copies of documents) in the company's possession or power as those Commissioners may reasonably require for the purpose of determining whether to grant the application, and
- (c) must contain such information as those Commissioners may reasonably require for that purpose.
- (2) An application by a company under section 751A or 751AA—
- (a) may be made at any time on or before the filing date (within the meaning of Schedule 18 to the Finance Act 1998) for the relevant company tax return of the company, and
- (b) may be amended or withdrawn at any time before the application is determined by those Commissioners.
- (3) If an application by a company under section 751A or 751AA is granted after the company has delivered its relevant company tax return, it has 30 days beginning with the day on which the application is granted in which to amend that return to give effect to section 751A or 751AA.
- (4) The time limits otherwise applicable to an amendment of a company tax return do not prevent an amendment being made under subsection (3).
- (5) If the HMRC Commissioners refuse an application by a company under section 751A or 751AA, the company may appeal . . . against the refusal.
- (6) Notice of an appeal must be given in writing to the HMRC Commissioners within 30 days after the application is refused.
- (7) On an appeal—
- (a) if the tribunal is satisfied that the relevant amount is a different amount from the amount specified in the application, it must direct the HMRC Commissioners to grant the application as if the amount specified in it were that different amount,
- (b) if the tribunal is satisfied that the relevant amount is the amount specified in the application, it must direct the HMRC Commissioners to grant the application, and
- (c) in any other case, the tribunal must confirm the refusal.
- (8) For the purposes of subsection (7) “*the relevant amount*”—
- (a) in the case of an appeal in respect of the refusal of an application under section 751A, means the amount (if any) equal to so much of the chargeable profits mentioned in subsection (4) of section 751A as can reasonably be regarded as representing the value mentioned in that subsection , and
- (b) in the case of an appeal in respect of the refusal of an application under section 751AA, has the meaning given by subsection (5) of that section.
- (9) Part 5 of the Management Act (appeals), apart from section 50, applies in relation to an appeal under this section as it applies in relation to an appeal against an assessment to tax.
- (10) In this section “*relevant company tax return*”, in relation to a company, means the return for the accounting period for which—
- (a) any sum is chargeable on the company under section 747(4)(a), or
- (b) any sum would be so chargeable but for section 751A or 751AA,
in respect of the chargeable profits of the controlled foreign company for the accounting period mentioned in section 751A(1) or 751AA(1).
- (11) In this section “*the HMRC Commissioners*” means the Commissioners for Her Majesty's Revenue and Customs.
#### Sections 774B and 774D: exceptions
##### 752A
- (1) This section has effect for the purpose of determining for the purposes of this Chapter who has a relevant interest in a controlled foreign company at any time; and references in this Chapter to relevant interests shall be construed accordingly.
- (2) A UK resident company which has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (3) below otherwise provides.
- (3) A UK resident company which has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if it has the interest by virtue of having a direct or indirect interest in another UK resident company.
- (4) A related person who has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (5) or (6) below otherwise provides.
- (5) A related person who has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if he has the interest by virtue of having a direct or indirect interest in—
- (a) a UK resident company; or
- (b) another related person.
- (6) A related person who has a direct or indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest to the extent that a UK resident company—
- (a) has the whole or any part of the same interest indirectly, by virtue of having a direct or indirect interest in the related person, and
- (b) by virtue of that indirect interest in the controlled foreign company, has a relevant interest in the company by virtue of subsection (2) above.
- (7) A person who—
- (a) has a direct interest in a controlled foreign company, but
- (b) does not by virtue of subsections (2) to (6) above have a relevant interest in the company by virtue of that interest,
has a relevant interest in the company by virtue of that interest unless subsection (8) below otherwise provides.
- (8) A person does not by virtue of subsection (7) above have a relevant interest in a controlled foreign company by virtue of having a direct interest in the company to the extent that another person—
- (a) has the whole or any part of the same interest indirectly, and
- (b) by virtue of that indirect interest, has a relevant interest in the company by virtue of subsections (2) to (6) above.
- (9) No person has a relevant interest in a controlled foreign company otherwise than as provided by subsections (2) to (8) above.
- (10) In this section—
- “*related person*” means a person who—is not a UK resident company, butis connected or associated with a UK resident company which has by virtue of subsection (2) above a relevant interest in the controlled foreign company in question;
- “*UK resident company*” means a company resident in the United Kingdom.
##### 752B
- (1) For the purposes of section 752(3) above, where a person has a relevant interest in a controlled foreign company by virtue of indirectly holding issued ordinary shares of the company, the percentage of the issued ordinary shares of the company which the relevant interest represents is equal to—
$$P×S$where—P is the product of the appropriate fractions of that person and each of the share-linked companies through which he indirectly holds the shares in question, other than the lowest share-linked company; andS is the percentage of issued ordinary shares of the controlled foreign company which is held directly by the lowest share-linked company.$
- (2) In subsection (1) above and this subsection—
- “the appropriate fraction", in the case of a person who directly holds ordinary shares of a share-linked company, means that fraction of the issued ordinary shares of that company which his holding represents;
- “*the lowest share-linked company*”, in relation to a person who indirectly holds ordinary shares of a controlled foreign company, means the share-linked company which directly holds the shares in question;
- “*share-linked company*” means a company which is share-linked to the controlled foreign company in question.
- (3) Where a person has different indirect holdings of shares of the controlled foreign company (as in a case where different shares are held through different companies which are share-linked to the controlled foreign company)—
- (a) subsection (1) above shall apply separately in relation to the different holdings with any necessary modifications; and
- (b) for the purposes of section 752(3) above the percentage of the issued ordinary shares of the company which the relevant interest represents is the aggregate of the percentages resulting from those separate applications.
- (4) Where, for the purposes of subsection (3) of section 752, the percentage of the issued ordinary shares of the controlled foreign company which a person directly or indirectly holds varies during the relevant accounting period, he shall be treated for the purposes of that subsection as holding throughout that period that percentage of the issued ordinary shares of the company which is equal to the sum of the relevant percentages for each holding period in the relevant accounting period.
- (5) For the purposes of subsection (4) above—
- “holding period", in the case of any person, means a part of the relevant accounting period during which the percentage of the issued ordinary shares of the controlled foreign company which the person holds (whether directly or indirectly) remains the same;
- “the relevant percentage", in the case of a holding period, means the percentage equal to—$P×HA$where—P is the percentage of the issued ordinary shares of the controlled foreign company which the person in question directly or indirectly holds in the holding period, as calculated in accordance with subsections (1) to (3) above so far as applicable;H is the number of days in the holding period; andA is the number of days in the relevant accounting period.
##### 752C
- (1) In this section “*the relevant provisions*” means sections 752 to 752B and this section.
- (2) For the purposes of the relevant provisions—
- (a) a person has a direct interest in a company if (and only if) he has an interest in the company otherwise than by virtue of having an interest in another company;
- (b) a person has an indirect interest in a company if (and only if) he has an interest in the company by virtue of having an interest in another company;
- (c) a person indirectly holds shares of a controlled foreign company if (and only if) he directly holds ordinary shares of a company which is share-linked to the controlled foreign company.
- (3) For the purposes of the relevant provisions, a company is “share-linked" to a controlled foreign company if it has an interest in the controlled foreign company only by virtue of directly holding ordinary shares—
- (a) of the controlled foreign company, or
- (b) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) above, or
- (c) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) or (b) above,
and so on.
- (4) For the purposes of the relevant provisions, a company (“company A") has an intermediate interest in a controlled foreign company if (and only if)—
- (a) it has a direct or indirect interest in the controlled foreign company; and
- (b) one or more other persons have relevant interests in the controlled foreign company by virtue of having a direct or indirect interest in company A.
- (5) Any interest or shares held by a nominee or bare trustee shall be treated for the purposes of the relevant provisions as held by the person or persons for whom the nominee or bare trustee holds the interest or shares.
- (6) Where—
- (a) an interest in a controlled foreign company is held in a fiduciary or representative capacity, and
- (b) subsection (5) above does not apply, but
- (c) there are one or more identifiable beneficiaries,
the interest shall be treated for the purposes of the relevant provisions as held by that beneficiary or, as the case may be, as apportioned on a just and reasonable basis among those beneficiaries.
- (7) In the relevant provisions—
- “*bare trustee*” means a person acting as trustee—for a person absolutely entitled as against the trustee; orfor any person who would be so entitled but for being a minor or otherwise under a disability; orfor two or more persons who are or would, but for all or any of them being a minor or otherwise under a disability, be jointly so entitled;
- “ordinary shares", in the case of any company, means shares of a single class, however described, which is the only class of shares issued by the company;
- “*the relevant accounting period*” means the accounting period mentioned in section 752(1);
- “*share*” includes a reference to a fraction of a share.
##### 754A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 754B
- (1) This section has effect where a determination requiring the Board’s sanction is made for any of the following purposes, that is to say—
- (a) the giving of a closure notice; or
- (b) the making of a discovery assessment.
- (2) If the closure notice or, as the case may be, notice of the discovery assessment is given to any person without—
- (a) the determination, so far as it is taken into account in the closure notice or the discovery assessment, having been approved by the Board, or
- (b) notification of the Board’s approval having been served on that person at or before the time of the giving of the notice,
the closure notice or, as the case may be, the discovery assessment shall be deemed to have been given or made (and in the case of an assessment notified) in the terms (if any) in which it would have been given or made had that determination not been taken into account.
- (3) A notification under subsection (2)(b) above—
- (a) must be in writing;
- (b) must state that the Board have given their approval on the basis that—
- (i) an amount of chargeable profits, and
- (ii) an amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question fall to be apportioned under section 747(3) to the person in question;
- (c) must state the amounts mentioned in sub-paragraphs (i) and (ii) of paragraph (b) above; and
- (d) subject to paragraphs (a) to (c) above, may be in such form as the Board may determine.
- (4) For the purposes of this section, the Board’s approval of a determination requiring their sanction—
- (a) must be given specifically in relation to the case in question and must apply to the amount determined; but
- (b) subject to that, may be given by the Board (either before or after the making of the determination) in any such form or manner as they may determine.
- (5) In this section references to a determination requiring the Board’s sanction are references (subject to subsection (6) below) to any determination of the amount of chargeable profits or creditable tax for an accounting period of a controlled foreign company which falls to be apportioned to a particular person under section 747(3).
- (6) For the purposes of this section, a determination shall be taken, in relation to a closure notice or a discovery assessment, not to be a determination requiring the Board’s sanction if—
- (a) an agreement about the relevant amounts has been made between an officer of the Board and the person in whose case it is made;
- (b) that agreement is in force at the time of the giving of the closure notice or, as the case may be, notice of the assessment; and
- (c) the matters to which the agreement relates include the amount determined.
- (7) In paragraph (a) of subsection (6) above, “*the relevant amounts*” means—
- (a) the amount of chargeable profits, and
- (b) the amount of creditable tax (which may be nil),
for the accounting period of the controlled foreign company in question which fall to be apportioned under section 747(3) to the person mentioned in that paragraph.
- (8) For the purposes of subsection (6) above an agreement made between an officer of the Board and any person (“the taxpayer") in relation to any matter shall be taken to be in force at any time if, and only if—
- (a) the agreement is one which has been made or confirmed in writing;
- (b) that time is after the end of the period of thirty days beginning—
- (i) in the case of an agreement made in writing, with the day of the making of the agreement, and
- (ii) in any other case, with the day of the agreement’s confirmation in writing; and
- (c) the taxpayer has not, before the end of that period of thirty days, served a notice on an officer of the Board stating that he is repudiating or resiling from the agreement.
- (9) The references in subsection (8) above to the confirmation in writing of an agreement are references to the service on the taxpayer by an officer of the Board of a notice—
- (a) stating that the agreement has been made; and
- (b) setting out the terms of the agreement.
- (10) The matters that may be questioned on so much of any appeal by virtue of any provision of the Management Act or Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters) as relates to a determination the making of which has been approved by the Board for the purposes of this section shall not include the Board’s approval, except to the extent that the grounds for questioning the approval are the same as the grounds for questioning the determination itself.
- (11) In this section—
- “*closure notice*” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998 (completion of enquiry and statement of conclusions);
- “*discovery assessment*” means a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule).
##### 755A
- (1) This section applies in any case where—
- (a) an amount (“the apportioned profit") of a controlled foreign company’s chargeable profits for an accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (b) the UK company carries on life assurance business in that one of its accounting periods (“the relevant accounting period") in which ends the accounting period of the controlled foreign company; and
- (c) the property or rights which represent the UK company’s relevant interest in the controlled foreign company constitute to any extent assets of the UK company’s long-term insurance fund.
- (2) Subsections (3) and (4) below apply if, in the case of the relevant accounting period, the UK company is charged to tax under the I minus E basis in respect of life assurance business.
- (3) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 in relation to the policy holders’ part of any BLAGAB apportioned profit shall be—
- (a) if a single rate of tax under section 88(1) of the Finance Act 1989 (lower corporation tax rate on certain insurance company profits) is applicable in relation to the relevant accounting period, that rate; or
- (b) if more than one such rate of tax is applicable in relation to the relevant accounting period, the average of those rates over the whole of that period.
- (4) Where this subsection applies, the “*appropriate rate*” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 shall be nil in relation to so much of the apportioned profit as is referable to gross roll-up business carried on by the UK company.
- (4A) In any case where—
- (a) paragraph 4 of Schedule 26 to this Act applies to a dividend received by the UK company, and
- (b) but for this subsection, subsection (5) of section 97 of TIOPA 2010 would apply to that dividend,
the amount of credit for foreign tax in respect of that dividend shall be treated, for the purposes of that section, as wholly attributable to basic life assurance and general annuity business.
- (5) If, in the case of the relevant accounting period, the UK company is charged to tax under section 35 of CTA 2009 (charge on trade profits) in respect of its profits from life assurance business, the “*appropriate rate*” for the purposes of—
- (a) section 747(4)(a), and
- (b) paragraph 1 of Schedule 26,
shall be nil in relation to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of its long-term insurance fund.
- (6) If, in the case of the relevant accounting period,—
- (a) the UK company is charged to tax under the I minus E basis in respect of life assurance business,
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company, and
- (c) the apportioned profit is to any extent referable to gross roll-up business,
so much of the creditable tax so apportioned as is attributable to the apportioned profit so far as so referable shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (7) If, in the case of the relevant accounting period,—
- (a) the UK company is charged to tax under section 35 of CTA 2009 in respect of its profits from life assurance business, and
- (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company,
so much of the creditable tax so apportioned as is attributable to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of the UK company’s long-term insurance fund shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished.
- (8) Any set off under paragraph 1 . . . of Schedule 26 against the UK company’s liability to tax under section 747(4)(a) in respect of the apportioned profit shall be made against only so much of that liability as is attributable to the eligible part of the apportioned profit.
- (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (10) For the purposes of this section, the “eligible part" of the apportioned profit is any BLAGAB apportioned profit, other than the policy holders’ part.
- (11) For the purposes of this section the policy holders' part of any BLAGAB apportioned profit is—
- (a) where subsection (11A) below applies, the whole of that profit, and
- (b) in any other case, the relevant fraction (within the meaning of subsection (11B) below) of that profit.
- (11A) This subsection applies if—
- (a) the UK company’s life assurance business is mutual business,
- (b) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is equal to all those profits, or
- (c) the policy holders' share of the UK company’s relevant profits for the relevant accounting period is more than its BLAGAB profits for that period.
- (11B) The relevant fraction for the purposes of subsection (11)(b) above is the fraction arrived at by dividing—
- (a) the policy holders' share of the UK company’s relevant profits for the relevant accounting period, by
- (b) the UK company’s BLAGAB profits for that period.
- (11BA) But where the BLAGAB profits for the relevant accounting period are nil, the relevant fraction—
- (a) if there are section 35 profits of the accounting period in respect of its life assurance business, is nil, and
- (b) otherwise, is such fraction as is just and reasonable;
and for this purpose there are section 35 profits if there are profits computed in accordance with the life assurance trade profits provisions after making adjustments in respect of losses in accordance with section 85A(4) of the Finance Act 1989.
- (11C) In subsections (11A) and (11B) above—
- (a) references to the policy holders' share of the UK company’s share of the relevant profits are to be construed in accordance with sections 88(3) and 89 of the Finance Act 1989, . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (12) In this section—
- “*BLAGAB apportioned profit*” means so much of the apportioned profit as is referable to basic life assurance and general annuity business carried on by the UK company;
- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (13) For the purposes of this section, the part of the apportioned profit which is referable to—
- (a) basic life assurance and general annuity business, or
- (ba) gross roll-up business,
carried on by the UK company is the part which would have been so referable under section 432A had the apportioned profit been a dividend paid to the UK company at the end of the accounting period mentioned in subsection (1)(a) above in respect of the property or rights which represent the UK company’s relevant interest in the controlled foreign company.
- (14) For the purposes of this section, any attribution of creditable tax to a particular part of the apportioned profit shall be made in the proportion which that part of the apportioned profit bears to the whole of the apportioned profit.
##### 755B
- (1) This section applies where—
- (a) a controlled foreign company carries on general insurance business in an accounting period;
- (b) an amount of the company’s chargeable profits, and an amount of its creditable tax (if any), for that accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company");
- (c) the UK company delivers a company tax return for that one of its accounting periods in which the controlled foreign company’s accounting period ends; and
- (d) in making or amending the return, the UK company has regard to accounts of the controlled foreign company drawn up using a method falling within subsection (2) below.
- (2) The methods which fall within this subsection are—
- (a) the method described in paragraph 58 in Section E of Part 2 of Schedule 3 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (which provides for a technical provision to be made in the accounts which is later replaced by a provision for estimated claims outstanding); and
- (b) any method which would have fallen within paragraph (a) above, had final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 58 of that Schedule, taken place, and been required to take place, no later than the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (3) Where this section applies—
- (a) the UK company may make any amendments of its company tax return arising from the replacement of the technical provision in the controlled foreign company’s accounts at any time within twelve months from the date on which the provision was replaced; and
- (b) notice of intention to enquire into the return under paragraph 24 of Schedule 18 to the Finance Act 1998 may be given at any time up to two years from that date (or at any later time in accordance with the general rule in sub-paragraph (3) of that paragraph).
- (4) If, in a case where this section applies, the accounts of the controlled foreign company are drawn up using a method falling within paragraph (b) of subsection (2) above—
- (a) the controlled foreign company, and
- (b) any person with an interest in the controlled foreign company,
shall be treated for the purposes of this section as if final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 58 of Schedule 3 to those Regulations, had taken place at, and been required to take place no later than, the end of the year referred to in that sub-paragraph as the third year following the underwriting year.
- (5) Regulations under section 755C may make provision with respect to the determination of the amount of the provision by which the technical provision is to be treated as replaced in cases falling within subsection (4) above.
- (6) In this section “general insurance business” means business which consists of the effecting or carrying out of contracts which fall within Part I of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
##### 755C
- (1) The Treasury may by regulations provide for the provisions of this Chapter to have effect with prescribed modifications in any case where a non-resident company—
- (a) carries on general insurance business; and
- (b) draws up accounts relating to that business using a method falling within subsection (2) of section 755B.
- (2) Regulations under subsection (1) above may—
- (a) make different provision for different cases;
- (b) make provision having effect in relation to accounting periods of non-resident companies ending not more than one year before the date on which the regulations are made; and
- (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit.
- (3) In this section—
- “*general insurance business*” has the same meaning as in section 755B;
- “*non-resident company*” means a company resident outside the United Kingdom;
- “*prescribed*” means prescribed in regulations under this section.
##### 755D
- (1) For the purposes of this Chapter “control", in relation to a company, means the power of a person to secure—
- (a) by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or
- (b) by virtue of any powers conferred by the articles of association or other document regulating the company or any other company,
that the affairs of the company are conducted in accordance with his wishes.
- (1A) For the purposes of this Chapter a person also controls a company if the person possesses, or is entitled to acquire, such rights as would—
- (a) if the whole of the income of the company were distributed, entitle the person to receive the greater part of the amount so distributed,
- (b) if the whole of the company's share capital were disposed of, entitle the person to receive the greater part of the proceeds of the disposal, or
- (c) in the event of the winding-up of the company or in any other circumstances, entitle the person to receive the greater part of the assets of the company which would then be available for distribution.
- (2) Where two or more persons, taken together, have the power mentioned in subsection (1) above or satisfy subsection (1A) above, they shall be taken for the purposes of this Chapter to control the company.
- (3) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing at least 40 per cent of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (4) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing—
- (a) at least 40 per cent, but
- (b) not more than 55 per cent,
of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company.
- (5) For the purposes of this Chapter any question—
- (a) whether a company is controlled by a person, or by two or more persons taken together, or
- (b) whether, in the case of any company, the applicable 40 per cent test is satisfied in the case of each of two persons who, taken together, control the company,
shall be determined after attributing to each of the persons all the rights and powers mentioned in subsection (6) below that are not already attributed to that person for the purposes of subsections (1) to (4) above.
- (6) The rights and powers referred to in subsection (5) above are—
- (a) rights and powers which the person is entitled to acquire at a future date or which he will, at a future date, become entitled to acquire;
- (b) rights and powers of other persons, to the extent that they are rights or powers falling within subsection (7) below;
- (c) if the person is resident in the United Kingdom, rights and powers of any person who is resident in the United Kingdom and connected with the person; and
- (d) if the person is resident in the United Kingdom, rights and powers which for the purposes of subsection (5) above would be attributed to a person who is resident in the United Kingdom and connected with the person (a “*UK connected person*”) if the UK connected person were himself the person.
- (7) Rights and powers fall within this subsection to the extent that they—
- (a) are required, or may be required, to be exercised in any one or more of the following ways, that is to say—
- (i) on behalf of the person;
- (ii) under the direction of the person; or
- (iii) for the benefit of the person; and
- (b) are not confined, in a case where a loan has been made by one person to another, to rights and powers conferred in relation to property of the borrower by the terms of any security relating to the loan.
- (8) In subsections (6)(b) to (d) and (7) above, the references to a person’s rights and powers include references to any rights or powers which he either—
- (a) is entitled to acquire at a future date, or
- (b) will, at a future date, become entitled to acquire.
- (9) In paragraph (d) of subsection (6) above, the reference to rights and powers which would be attributed to a UK connected person if he were the person includes a reference to rights and powers which, by applying that paragraph wherever one person resident in the United Kingdom is connected with another person, would be so attributed to him through a number of persons each of whom is resident in the United Kingdom and connected with at least one of the others.
- (10) In determining for the purposes of this section whether one person is connected with another in relation to a company, section 1122(4) of CTA 2010 shall be disregarded.
- (11) References in this section—
- (a) to rights and powers of a person, or
- (b) to rights and powers which a person is or will become entitled to acquire,
include references to rights or powers which are exercisable by that person, or (when acquired by that person) will be exercisable, only jointly with one or more other persons.
### Meaning of offshore fund
#### Qualifying vehicles
##### 756A
@@ -35401,6 +34977,8 @@
[^c23417301]: [Ss. 257A-257BB](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) omitted (with effect in accordance with Sch. 1 para. 7 of the repealing Act) by virtue of [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [Sch. 1 para. 2(e)](https://www.legislation.gov.uk/ukpga/2009/10/schedule/1/paragraph/2/e)
[^c23417311]: [Ss. 257A-257BB](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) omitted (with effect in accordance with Sch. 1 para. 7 of the repealing Act) by virtue of [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [Sch. 1 para. 2(e)](https://www.legislation.gov.uk/ukpga/2009/10/schedule/1/paragraph/2/e)
[^c21584501]: [Ss. 257BA](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA), [257BB](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB) substituted for s. 257B (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 20](https://www.legislation.gov.uk/ukpga/1992/48/section/20), [Sch. 5 paras.2](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/2), [10](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/10).
[^c23408771]: Words in [s. 257BA](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA) heading inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [53(9)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/53/9)
@@ -35411,6 +34989,8 @@
[^c21584511]: [Ss. 257BA](https://www.legislation.gov.uk/ukpga/1988/1/section/257BA), [257BB](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB) substituted for s. 257B (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 20](https://www.legislation.gov.uk/ukpga/1992/48/section/20), [Sch. 5 paras.2](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/2), [10](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/10).
[^c23417331]: [Ss. 257A-257BB](https://www.legislation.gov.uk/ukpga/1988/1/section/257A) omitted (with effect in accordance with Sch. 1 para. 7 of the repealing Act) by virtue of [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [Sch. 1 para. 2(e)](https://www.legislation.gov.uk/ukpga/2009/10/schedule/1/paragraph/2/e)
[^c23415291]: Words in [s. 257C](https://www.legislation.gov.uk/ukpga/1988/1/section/257C) sidenote substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 34(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/34/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23411261]: Words in [s. 257C](https://www.legislation.gov.uk/ukpga/1988/1/section/257C) sidenote substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [55(d)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/55/d)
@@ -35441,6 +35021,8 @@
[^c21585291]: [S. 264](https://www.legislation.gov.uk/ukpga/1988/1/section/264) repealed (1988-89 and subsequent years) by [Finance Act 1988 (c. 39)](https://www.legislation.gov.uk/ukpga/1988/39), [s. 25(3)](https://www.legislation.gov.uk/ukpga/1988/39/section/25/3), [Sch.14 Part IV](https://www.legislation.gov.uk/ukpga/1988/39/schedule/14)
[^c23417351]: [S. 265](https://www.legislation.gov.uk/ukpga/1988/1/section/265) omitted (with effect in accordance with Sch. 1 para. 7 of the repealing Act) by virtue of [Finance Act 2009 (c. 10)](https://www.legislation.gov.uk/ukpga/2009/10), [Sch. 1 para. 2(g)](https://www.legislation.gov.uk/ukpga/2009/10/schedule/1/paragraph/2/g)
[^c23418271]: [S. 266](https://www.legislation.gov.uk/ukpga/1988/1/section/266) relief abolished and s. 266 restricted by [Finance Act 2012 (c. 14)](https://www.legislation.gov.uk/ukpga/2012/14), [Sch 39 para. 23](https://www.legislation.gov.uk/ukpga/2012/14/schedule/39/paragraph/23)
[^c21585671]: Source-1970 s.19(1); 1976 Sch.4 3(1)
@@ -36393,6 +35975,8 @@
[^c23553391]: [Pt. 11 Ch. 1](https://www.legislation.gov.uk/ukpga/1988/1/part/11/chapter/1) (ss. 414-418) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 40](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/40), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23553401]: [Pt. 11 Ch. 2](https://www.legislation.gov.uk/ukpga/1988/1/part/11/chapter/2) (ss. 419-422) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 41](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/41), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23553421]: [Pt. 11 Ch. 2](https://www.legislation.gov.uk/ukpga/1988/1/part/11/chapter/2) (ss. 419-422) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 41](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/41), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23553431]: [Pt. 11 Ch. 2](https://www.legislation.gov.uk/ukpga/1988/1/part/11/chapter/2) (ss. 419-422) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 41](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/41), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
@@ -36827,6 +36411,10 @@
[^c23724851]: [S. 487](https://www.legislation.gov.uk/ukpga/1988/1/section/487) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 164](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/164), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/3/part/1) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23724671]: [S. 488](https://www.legislation.gov.uk/ukpga/1988/1/section/488) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 59](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/59), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23724691]: [S. 489](https://www.legislation.gov.uk/ukpga/1988/1/section/489) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 60](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/60), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23724711]: [S. 490](https://www.legislation.gov.uk/ukpga/1988/1/section/490) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 61](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/61), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23724871]: [S. 491](https://www.legislation.gov.uk/ukpga/1988/1/section/491) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 165](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/165), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/3/part/1) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
@@ -36865,6 +36453,8 @@
[^c22801801]: [S. 499](https://www.legislation.gov.uk/ukpga/1988/1/section/499) repealed (with effect in accordance with Sch. 3 para. 31(2) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 31(1)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/31/1), [Sch. 27 Pt. 3(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/2), Note
[^c23729101]: [Ss. 500-501B](https://www.legislation.gov.uk/ukpga/1988/1/section/500) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 68](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/68), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23729241]: [Ss. 500-501B](https://www.legislation.gov.uk/ukpga/1988/1/section/500) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 68](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/68), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23729121]: [Ss. 500-501B](https://www.legislation.gov.uk/ukpga/1988/1/section/500) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 68](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/68), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
@@ -36947,6 +36537,8 @@
[^c23733211]: [S. 506A](https://www.legislation.gov.uk/ukpga/1988/1/section/506A) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 74](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/74), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23733231]: [S. 506B](https://www.legislation.gov.uk/ukpga/1988/1/section/506B) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 75](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/75), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23733251]: [S. 506C](https://www.legislation.gov.uk/ukpga/1988/1/section/506C) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 76](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/76), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
[^c23733271]: [S. 507](https://www.legislation.gov.uk/ukpga/1988/1/section/507) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the repealing Act) by [Corporation Tax Act 2010 (c. 4)](https://www.legislation.gov.uk/ukpga/2010/4), [Sch. 1 para. 77](https://www.legislation.gov.uk/ukpga/2010/4/schedule/1/paragraph/77), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2010/4/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2010/4/schedule/2))
@@ -40393,54 +39985,6 @@
[^c21584591]: [S. 257B(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257B/3) applied (with modifications) for the year of assessment 1990-91 by [S.I. 1993/415](https://www.legislation.gov.uk/uksi/1993/415), [regs. 1(1)](https://www.legislation.gov.uk/uksi/1993/415/regulation/1/1), [9](https://www.legislation.gov.uk/uksi/1993/415/regulation/9), [Sch.2](https://www.legislation.gov.uk/uksi/1993/415/schedule/2)
[^c21585391]: 1988(F) s.35*and* Sch.3 para.8*for* 1990-91*and subsequent years. Previously* “Relief for blind persons.**265.**—(1) Subject to subsection (3) below, if the claimant proves—(a) that he is a married man who for the year of assessment has his wife living with him, and that one of them was, and the other was not, a registered blind person for the whole or part of the year; or (b) that, not being such a married man, he was a registered blind person for the whole or part of the year, he shall be entitled to a deduction of £540 from his total income. (2) Subject to subsection (3) below, if the claimant proves—(a) that he is a married man who for the year of assessment has his wife living with him, and (b) that he was a registered blind person for the whole or part of the year and his wife was also a registered blind person for the whole or part of the year, he shall be entitled to a deduction of £1,080 from his total income. (3)*Unless a claimant who is entitled to relief for the year of assessment under section* 264*in respect of the services of a son or daughter relinquishes his claim to that relief, he shall not be allowed relief under this section for that year* (*Repealed by* 1988(F) ss.25(3), 148*and* Sch.14 Part IV*for* 1988-89*and subsequent years.*). (4) In this section “registered blind person” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or in Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act.”.*And see* Table E Vol.1*for previous years.*
[^c21585461]: [S. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) modified (1990-91) by [The Lloyd's Underwriters (Tax) (1990-91) Regulations 1993 (S.I. 1993/415)](https://www.legislation.gov.uk/uksi/1993/415), [regs. 1](https://www.legislation.gov.uk/uksi/1993/415/regulation/1), [9](https://www.legislation.gov.uk/uksi/1993/415/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1993/415/schedule/2)
[^c22219201]: [S. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) modified (1991-92) by [The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728)](https://www.legislation.gov.uk/uksi/1994/728), [regs. 1](https://www.legislation.gov.uk/uksi/1994/728/regulation/1), [9](https://www.legislation.gov.uk/uksi/1994/728/regulation/9), [Sch. 2](https://www.legislation.gov.uk/uksi/1994/728/schedule/2) [S. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c21585471]: Words in [s. 265(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/6) substituted (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by [Finance (No. 2) Act 1992 (c. 48)](https://www.legislation.gov.uk/ukpga/1992/48), [s. 20](https://www.legislation.gov.uk/ukpga/1992/48/section/20), [Sch. 5 paras. 8(4)](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/8/4), [10](https://www.legislation.gov.uk/ukpga/1992/48/schedule/5/paragraph/10).
[^c22225601]: Words in [s. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) repealed (with effect as mentioned in s. 134(2) of the repealing Act) by Finance Act 1996, Sch. 20 para. 19, Sch. 41 Pt. 5(10), Note
[^c22749231]: [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (1999-00) by [S.I. 1999/597](https://www.legislation.gov.uk/uksi/1999/597), [art. 2(5)](https://www.legislation.gov.uk/uksi/1999/597/article/2/5) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2000-01) by [S.I. 2000/806](https://www.legislation.gov.uk/uksi/2000/806), [art. 2(5)](https://www.legislation.gov.uk/uksi/2000/806/article/2/5) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2001-02) by [S.I. 2001/638](https://www.legislation.gov.uk/uksi/2001/638), [art. 2(3)](https://www.legislation.gov.uk/uksi/2001/638/article/2/3) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2002-03) by [S.I. 2002/707](https://www.legislation.gov.uk/uksi/2002/707), [art. 2(4)](https://www.legislation.gov.uk/uksi/2002/707/article/2/4) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2003-04) by [S.I. 2002/2930](https://www.legislation.gov.uk/uksi/2002/2930), [art. 2(4)](https://www.legislation.gov.uk/uksi/2002/2930/article/2/4) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2004-05) by [S.I. 2003/3215](https://www.legislation.gov.uk/uksi/2003/3215), [art. 2(4)](https://www.legislation.gov.uk/uksi/2003/3215/article/2/4) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2005-06) by [S.I. 2004/3161](https://www.legislation.gov.uk/uksi/2004/3161), [art. 2(4)](https://www.legislation.gov.uk/uksi/2004/3161/article/2/4) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2006-07) by [S.I. 2005/3327](https://www.legislation.gov.uk/uksi/2005/3327), [art. 2(5)](https://www.legislation.gov.uk/uksi/2005/3327/article/2/5) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2007-08) by [S.I. 2006/3241](https://www.legislation.gov.uk/uksi/2006/3241), [art. 2(5)](https://www.legislation.gov.uk/uksi/2006/3241/article/2/5) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2008-09) by [S.I. 2008/673](https://www.legislation.gov.uk/uksi/2008/673), [art. 3](https://www.legislation.gov.uk/uksi/2008/673/article/3) [S. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) amended (2009-10) by [S.I. 2008/3024](https://www.legislation.gov.uk/uksi/2008/3024), [art. 3](https://www.legislation.gov.uk/uksi/2008/3024/article/3)
[^c22749151]: Words in [s. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) substituted (with effect in accordance with [s. 56(3)](https://www.legislation.gov.uk/ukpga/1997/16/section/56/3) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 56(1)](https://www.legislation.gov.uk/ukpga/1997/16/section/56/1)
[^c22749171]: [S. 265(1A)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1A) inserted (19.3.1997) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [s. 56(2)](https://www.legislation.gov.uk/ukpga/1997/16/section/56/2)
[^c23411281]: Words in [s. 265(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/a) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(2)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/2)
[^c23411301]: Words in [s. 265(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/b) substituted (5.12.2005) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(3)(a)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/3/a)
[^c23411341]: [S. 265(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/4) omitted (5.12.2005) by virtue of [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(4)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/4)
[^c23411381]: Words in [s. 265(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/6) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [56(6)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/56/6)
[^c23415341]: Words in [s. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(2)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/2/a) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23414401]: Words in [s. 265(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(2)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/2/b), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415361]: Words in [s. 265(2)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/a) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(3)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/3/a) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415381]: [S. 265(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2/b) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(3)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/3/b) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415401]: Words in [s. 265(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(3)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/3/c) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415421]: [S. 265(2A)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/2A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/4) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23414421]: [S. 265(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/5), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415441]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(6)(a)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/6/a) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415461]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(6)(b)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/6/b) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415481]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(6)(c)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/6/c) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23415501]: [S. 265(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/8) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 35(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/35/7) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [15(1)(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/15/1/3))
[^c23418231]: Words in [s. 265(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/265/5) substituted (1.4.2010, subject to art. 10(2) of the commencing S.I.) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [s. 118](https://www.legislation.gov.uk/ukpga/2008/9/section/118), [Sch. 39 para. 20](https://www.legislation.gov.uk/ukpga/2008/9/schedule/39/paragraph/20); [S.I. 2009/403](https://www.legislation.gov.uk/uksi/2009/403), [art. 2(2)](https://www.legislation.gov.uk/uksi/2009/403/article/2/2)
[^c21585891]: Source-1975 s.7; 1976 Sch.4 19(1); 1984 s.72(5)
[^c23412061]: Words in [s. 268(7)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/268/7/b) substituted (6.4.2006) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 284(1)](https://www.legislation.gov.uk/ukpga/2004/12/section/284/1), [Sch. 35 para. 11](https://www.legislation.gov.uk/ukpga/2004/12/schedule/35/paragraph/11) (with [Sch. 36](https://www.legislation.gov.uk/ukpga/2004/12/schedule/36))
@@ -40467,86 +40011,6 @@
[^c23417841]: [S. 272(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/272/7) omitted (13.8.2009) by virtue of The Finance Act 2009, Schedule 47 (Consequential Amendments) Order 2009 ([S.I. 2009/2035](https://www.legislation.gov.uk/uksi/2009/2035)), art. 1, Sch. para. 17
[^c22219341]: [S. 257B-262](https://www.legislation.gov.uk/ukpga/1988/1/section/257B) restricted (with effect as mentioned in [s. 77(7)](https://www.legislation.gov.uk/ukpga/1994/9/section/77/7) of the amending Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 4(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/4/1)
[^c22219501]: [S. 257BB(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/5) modified (1992-93, 1993-94 and 1994-5) by [The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352)](https://www.legislation.gov.uk/uksi/1995/352), [regs. 1](https://www.legislation.gov.uk/uksi/1995/352/regulation/1), [14](https://www.legislation.gov.uk/uksi/1995/352/regulation/14), [15](https://www.legislation.gov.uk/uksi/1995/352/regulation/15), [Sch.](https://www.legislation.gov.uk/uksi/1995/352/schedule)
[^c22181391]: [S. 257BB(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/6) repealed (with effect as mentioned in s. 77(7) of the repealing Act) by [Finance Act 1994 (c. 9)](https://www.legislation.gov.uk/ukpga/1994/9), [Sch. 8 para. 3(4)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/8/paragraph/3/4), [Sch. 26 Pt. 5(1)](https://www.legislation.gov.uk/ukpga/1994/9/schedule/26/part/5/1), Note
[^c23410961]: Words in [s. 257BB(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/2) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(3)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/3)
[^c23411141]: Words in [s. 257BB(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/4) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by [The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229)](https://www.legislation.gov.uk/uksi/2005/3229), [regs. 1(1)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/1/1), [54(5)](https://www.legislation.gov.uk/uksi/2005/3229/regulation/54/5)
[^c23415191]: [S. 257BB(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/2) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415211]: [S. 257BB(1A)(1B)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/1A/1B) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/3) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415231]: [S. 257BB(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/4) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415251]: [S. 257BB(3AA)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3AA) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/5) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23414351]: [S. 257BB(3A)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/3A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/6), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23415271]: [S. 257BB(5A)-(5E)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/5A) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 33(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/33/7) (with [Sch. 2 paras. 14](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/14), [16(1)(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/16/1/5), [17(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2/paragraph/17/6))
[^c23418211]: Words in [s. 257BB(5)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/257BB/5/a) substituted (1.4.2010, subject to art. 10(2) of the commencing S.I.) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [s. 118](https://www.legislation.gov.uk/ukpga/2008/9/section/118), [Sch. 39 para. 19](https://www.legislation.gov.uk/ukpga/2008/9/schedule/39/paragraph/19); [S.I. 2009/403](https://www.legislation.gov.uk/uksi/2009/403), [art. 2(2)](https://www.legislation.gov.uk/uksi/2009/403/article/2/2)
[^c23411921]: [S. 257AB(2)(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4/5) amended (2006-07) by [S.I. 2005/3327](https://www.legislation.gov.uk/uksi/2005/3327), [art. 2(4)](https://www.legislation.gov.uk/uksi/2005/3327/article/2/4) [S. 257AB(2)(4)(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4/5) amended (2007-08) by [S.I. 2006/3241](https://www.legislation.gov.uk/uksi/2006/3241), [art. 2(4)](https://www.legislation.gov.uk/uksi/2006/3241/article/2/4) [S. 257AB(2)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4) amended (2008-09) by [S.I. 2008/673](https://www.legislation.gov.uk/uksi/2008/673), [art. 2(5)](https://www.legislation.gov.uk/uksi/2008/673/article/2/5) [S. 257AB(2)(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2/4) amended (2009-10) by [S.I. 2008/3024](https://www.legislation.gov.uk/uksi/2008/3024), [art. 2(d)](https://www.legislation.gov.uk/uksi/2008/3024/article/2/d)
[^c23414961]: Words in [s. 257AB(1)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/1/d) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23414991]: Words in [s. 257AB(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/2) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415011]: Words in [s. 257AB(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/4) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415031]: Words in [s. 257AB(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415051]: Words in [s. 257AB(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/6) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(6)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/6) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23415071]: [S. 257AB(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/10) inserted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 31(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/31/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23418191]: Words in [s. 257AB(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/257AB/9) substituted (1.4.2010, subject to art. 10(2) of the commencing S.I.) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [s. 118](https://www.legislation.gov.uk/ukpga/2008/9/section/118), [Sch. 39 para. 18](https://www.legislation.gov.uk/ukpga/2008/9/schedule/39/paragraph/18); [S.I. 2009/403](https://www.legislation.gov.uk/uksi/2009/403), [art. 2(2)](https://www.legislation.gov.uk/uksi/2009/403/article/2/2)
[^c21599561]: *See* 1970(M) s.109—*application of* s.419*to corporation tax enactments generally.*
[^c21599571]: [S. 419(1)(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/1/3): 30.9.1993 appointed for the purposes of s. 419(1)(3) by [S.I. 1992/3066](https://www.legislation.gov.uk/uksi/1992/3066), [art. 2(2)(b)](https://www.legislation.gov.uk/uksi/1992/3066/article/2/2/b)
[^c21599581]: Source—1970 s.286(1); 1972 Sch.17 3(2); 1987 (No.2) s.90(3)
[^c21599591]: Source—1970 s.286(2)
[^c21599621]: Source—1970 s.286(5); 1972 Sch.17 3(4); 1986 s.43(2); 1976 s.44
[^c21599631]: Source—1970 s.286(7)-(9)
[^c22746021]: [S. 419(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/3) substituted (with effect in accordance with [s. 173(6)](https://www.legislation.gov.uk/ukpga/1996/8/section/173/6) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 173(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/173/2)
[^c22746081]: [S. 419(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4A) inserted (with effect in accordance with [s. 173(6)](https://www.legislation.gov.uk/ukpga/1996/8/section/173/6) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 173(3)](https://www.legislation.gov.uk/ukpga/1996/8/section/173/3)
[^c22767981]: Words in [s. 419(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/6) repealed (with effect in accordance with s. 173(6) of the repealing Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [s. 173(4)](https://www.legislation.gov.uk/ukpga/1996/8/section/173/4), [Sch. 41 Pt. 5(29)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/41/part/5/29), Note
[^c22748711]: Words in [s. 419(1)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/1) substituted (with effect in accordance with [Sch. 3 para. 24(5)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 24(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/2)
[^c22748911]: Words in [s. 419(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/3) inserted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/4/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para. 47(2)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/47/2); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c22748731]: Word in [s. 419(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4) renumbered as s. 419(4)(a) (with effect in accordance with [Sch. 3 para. 24(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/6) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 24(3)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/3/a)
[^c22748771]: [S. 419(4)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4/b) and preceding word inserted (with effect in accordance with [Sch. 3 para. 24(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/6) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 24(3)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/3/b)
[^c22748871]: Words in [s. 419(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4) repealed (with effect in accordance with s. 117(4)(5) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para 47(3)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/47/3), [Sch. 27 Pt. 3(28)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/28), Note; [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c22748761]: Words in [s. 419(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4) inserted (with effect in accordance with [Sch. 3 para. 24(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/6) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 24(3)(c)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/3/c)
[^c22748801]: Word in [s. 419(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4A) renumbered as s. 419(4A)(a) (with effect in accordance with [Sch. 3 para. 24(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/6) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 24(4)(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/4/a)
[^c22748821]: [S. 419(4A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4A/b) and preceding word inserted (with effect in accordance with [Sch. 3 para. 24(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/6) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 24(4)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/4/b)
[^c22748841]: Words in [s. 419(4A)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4A) inserted (with effect in accordance with [Sch. 3 para. 24(6)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/6) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 3 para. 24(4)(c)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/3/paragraph/24/4/c)
[^c22748891]: [S. 419(4B)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4B) inserted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/4/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para. 47(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/47/4); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c23481401]: Words in [s. 419(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/419/4) substituted (1.4.2010) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [s. 118(2)](https://www.legislation.gov.uk/ukpga/2008/9/section/118/2), [Sch. 39 para. 22](https://www.legislation.gov.uk/ukpga/2008/9/schedule/39/paragraph/22); [S.I. 2009/403](https://www.legislation.gov.uk/uksi/2009/403), [art. 2(2)](https://www.legislation.gov.uk/uksi/2009/403/article/2/2) (with [art. 10](https://www.legislation.gov.uk/uksi/2009/403/article/10))
[^c22770741]: Source—1970 s.323(1); 1973 s.40(7); 1982 s.58(7)
[^c22770761]: [S. 431(2)](https://www.legislation.gov.uk/ukpga/1988/1/section/431/2) modified (31.7.1992 with effect as mentioned in reg. 1 of the modifying S.I.) by [S.I. 1992/1655](https://www.legislation.gov.uk/uksi/1992/1655), [regs. 1](https://www.legislation.gov.uk/uksi/1992/1655/regulation/1), [5](https://www.legislation.gov.uk/uksi/1992/1655/regulation/5) (as amended (31.12.1993) by [The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 1993 (S.I. 1993/3111)](https://www.legislation.gov.uk/uksi/1993/3111), [regs. 1](https://www.legislation.gov.uk/uksi/1993/3111/regulation/1), [5](https://www.legislation.gov.uk/uksi/1993/3111/regulation/5), [6](https://www.legislation.gov.uk/uksi/1993/3111/regulation/6); and as further amended (19.3.1997) by [The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 1997 (S.I. 1997/471)](https://www.legislation.gov.uk/uksi/1997/471), [regs. 1](https://www.legislation.gov.uk/uksi/1997/471/regulation/1), [6](https://www.legislation.gov.uk/uksi/1997/471/regulation/6))
@@ -42161,118 +41625,6 @@
[^c23717821]: Words in [s. 461C(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/461C/5) omitted (1.4.2009) by virtue of [The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56)](https://www.legislation.gov.uk/uksi/2009/56), [art. 1(2)](https://www.legislation.gov.uk/uksi/2009/56/article/1/2), [Sch. 1 para. 145](https://www.legislation.gov.uk/uksi/2009/56/schedule/1/paragraph/145)
[^c21609491]: Source—1970 s.341; 1972 Sch.11 6
[^c21609511]: *See reference to approved housing associations in* 1988(F) s.43(3)*and* 44.
[^c21609521]: [1965 c. 12](https://www.legislation.gov.uk/ukpga/1965/12).
[^c21609531]: [1969 c.24 (N.I.)](https://www.legislation.gov.uk/apni/1969/24).
[^c21609541]: [1985 c. 68](https://www.legislation.gov.uk/ukpga/1985/68).
[^c21609551]: Words in [s. 488(6)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/6) substituted (15.9.1992) by [S.I. 1992/1725 (N.I. 15)](https://www.legislation.gov.uk/nisi/1992/1725), [arts. 1(2)](https://www.legislation.gov.uk/nisi/1992/1725/article/1/2), [107](https://www.legislation.gov.uk/nisi/1992/1725/article/107), [Sch. 8 para. 5](https://www.legislation.gov.uk/nisi/1992/1725/schedule/8/paragraph/5)
[^c21609561]: [S.I. 1979/1573](https://www.legislation.gov.uk/uksi/1979/1573) (N.I.12.).
[^c22792821]: [S. 488(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/9) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 28(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/28/2)
[^c22792831]: Words in [s. 488(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/10) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 28(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/28/3)
[^c22792851]: [S. 488(11)(11A)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/11/11A) substituted for s. 488(11) (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 28(4)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/28/4)
[^c22793891]: [S. 488(7A)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/7A) inserted (1.10.1996) by [Housing Act 1996 (c. 52)](https://www.legislation.gov.uk/ukpga/1996/52), [s. 232(3)](https://www.legislation.gov.uk/ukpga/1996/52/section/232/3), [Sch. 3 para. 8(2)](https://www.legislation.gov.uk/ukpga/1996/52/schedule/3/paragraph/8/2); [S.I. 1996/2402](https://www.legislation.gov.uk/uksi/1996/2402), [art. 3](https://www.legislation.gov.uk/uksi/1996/2402/article/3) (with [Sch.](https://www.legislation.gov.uk/uksi/1996/2402/schedule))
[^c22805841]: [S. 488](https://www.legislation.gov.uk/ukpga/1988/1/section/488): functions transferred (1.7.1999 with effect in accordance with art. 1(2) of the affecting S.I.) by [The National Assembly for Wales (Transfer of Functions) Order 1999 (S.I. 1999/672)](https://www.legislation.gov.uk/uksi/1999/672), [art. 2](https://www.legislation.gov.uk/uksi/1999/672/article/2), [Sch. 1](https://www.legislation.gov.uk/uksi/1999/672/schedule/1)
[^c22801651]: [S. 488(3)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/3) repealed (with effect in accordance with s. 38(2)(3) of the repealing Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 27 Pt. 3(4)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/27/part/3/4), Note
[^c22802521]: Words in [s. 488(11A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/11A/a) substituted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/uksi/1998/3173/section/117/4/5) of the amending Act) by Finance Act 1998 (c, 36), Sch. 19 para. 48(2)(a); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c22802541]: Words in [s. 488(11A)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/11A) substituted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/4/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para. 48(2)(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/48/2/b); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c22804761]: Words in [s. 488(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/1/b) substituted (with effect in accordance with [Sch. 4 para. 18(2)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/18/2) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 15(2)(a)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/15/2/a)
[^c22804171]: [S. 488(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/1/c) repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 15(2)(b)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/15/2/b), [Sch. 20 Pt. 3(7)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/7), Note 2
[^c22804201]: [S. 488(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/2/b) and preceding word repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 15(3)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/15/3), [Sch. 20 Pt. 3(7)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/7), Note 2
[^c22804221]: Words in [s. 488(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/4) repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by Finance Act 1999 (c, 16), Sch. 4 para. 15(4), Sch. 20 Pt. 3(7), Note 2
[^c22804781]: Words in [s. 488(11A)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/11A) substituted (with effect in accordance with [Sch. 4 para. 18(2)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/18/2) of the amending Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 15(5)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/15/5)
[^c22804241]: [S. 488(12)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/12) repealed (with effect in accordance with Sch. 4 para. 18(2) of the repealing Act) by [Finance Act 1999 (c. 16)](https://www.legislation.gov.uk/ukpga/1999/16), [Sch. 4 para. 15(6)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/4/paragraph/15/6), [Sch. 20 Pt. 3(7)](https://www.legislation.gov.uk/ukpga/1999/16/schedule/20/part/3/7), Note 2
[^c23724271]: Words in [s. 488(6)(iii)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/6/iii) substituted (29.7.2004) by [The Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2004 (S.I. 2004/2030)](https://www.legislation.gov.uk/uksi/2004/2030), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2004/2030/article/1/1), [5](https://www.legislation.gov.uk/uksi/2004/2030/article/5)
[^c23724291]: [S. 488(7A)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/7A) modified (1.12.2008) by [The Transfer of Housing Corporation Functions (Modifications and Transitional Provisions) Order 2008 (S.I. 2008/2839)](https://www.legislation.gov.uk/uksi/2008/2839), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2008/2839/article/1/1), [3](https://www.legislation.gov.uk/uksi/2008/2839/article/3), [Sch. para. 1](https://www.legislation.gov.uk/uksi/2008/2839/schedule/paragraph/1); [S.I. 2008/3068](https://www.legislation.gov.uk/uksi/2008/3068), [arts. 1(2)](https://www.legislation.gov.uk/uksi/2008/3068/article/1/2), [2(1)(b)](https://www.legislation.gov.uk/uksi/2008/3068/article/2/1/b)
[^c23724311]: Words in [s. 488(7A)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/7A) inserted (1.4.2010) by [Housing and Regeneration Act 2008 (c. 17)](https://www.legislation.gov.uk/ukpga/2008/17), [s. 325(1)](https://www.legislation.gov.uk/ukpga/2008/17/section/325/1), [Sch. 9 para. 13(a)](https://www.legislation.gov.uk/ukpga/2008/17/schedule/9/paragraph/13/a); [S.I. 2010/862](https://www.legislation.gov.uk/uksi/2010/862), [art. 2](https://www.legislation.gov.uk/uksi/2010/862/article/2) (with [Sch.](https://www.legislation.gov.uk/uksi/2010/862/schedule))
[^c23724331]: [S. 488(7A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/7A/a) substituted (1.4.2010) by [Housing and Regeneration Act 2008 (c. 17)](https://www.legislation.gov.uk/ukpga/2008/17), [s. 325(1)](https://www.legislation.gov.uk/ukpga/2008/17/section/325/1), [Sch. 9 para. 13(b)](https://www.legislation.gov.uk/ukpga/2008/17/schedule/9/paragraph/13/b); [S.I. 2010/862](https://www.legislation.gov.uk/uksi/2010/862), [art. 2](https://www.legislation.gov.uk/uksi/2010/862/article/2) (with [Sch.](https://www.legislation.gov.uk/uksi/2010/862/schedule))
[^c22803911]: [S. 488(7A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/488/7A/b) and preceding word repealed (1.11.1998) by [Government of Wales Act 1998 (c. 38)](https://www.legislation.gov.uk/ukpga/1998/38), [ss. 140](https://www.legislation.gov.uk/ukpga/1998/38/section/140), [158](https://www.legislation.gov.uk/ukpga/1998/38/section/158), [Sch. 16 para. 56](https://www.legislation.gov.uk/ukpga/1998/38/schedule/16/paragraph/56), [Sch. 18 Pt. 6](https://www.legislation.gov.uk/ukpga/1998/38/schedule/18/part/6); [S.I. 1998/2244](https://www.legislation.gov.uk/uksi/1998/2244), [art. 5](https://www.legislation.gov.uk/uksi/1998/2244/article/5)
[^c21609571]: See 1976(D)—*exemption of certain housing associations from development land tax.* 1976(D)*repealed from* 19*March* 1985.
[^c21609581]: Source—1970 s.341A
[^c21609591]: [1965 c. 12](https://www.legislation.gov.uk/ukpga/1965/12).
[^c21609601]: *See reference to approved self-build societies in* 1988(F) s.43(3)*and* s.44.
[^c21609611]: [1985 c. 68](https://www.legislation.gov.uk/ukpga/1985/68).
[^c21609621]: [S.I. 1981/156 (N.I. 3)](https://www.legislation.gov.uk/nisi/1981/156).
[^c21609631]: [1965 c. 12](https://www.legislation.gov.uk/ukpga/1965/12).
[^c21609641]: [1969 c. 24 (N.I.)](https://www.legislation.gov.uk/apni/1969/24).
[^c22792891]: [S. 489(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/7) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 29(2)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/29/2)
[^c22792901]: Words in [s. 489(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/8) substituted (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 29(3)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/29/3)
[^c22792921]: [S. 489(9)(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/9/9A) substituted for s. 489(9) (with effect in accordance with [s. 134(2)](https://www.legislation.gov.uk/ukpga/1996/8/section/134/2) of the amending Act) by [Finance Act 1996 (c. 8)](https://www.legislation.gov.uk/ukpga/1996/8), [Sch. 20 para. 29(4)](https://www.legislation.gov.uk/ukpga/1996/8/schedule/20/paragraph/29/4)
[^c22793871]: [S. 489(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/5A) inserted (1.10.1996) by [Housing Act 1996 (c. 52)](https://www.legislation.gov.uk/ukpga/1996/52), [s. 232(3)](https://www.legislation.gov.uk/ukpga/1996/52/section/232/3), [Sch. 3 para. 8(3)](https://www.legislation.gov.uk/ukpga/1996/52/schedule/3/paragraph/8/3); [S.I. 1996/2402](https://www.legislation.gov.uk/uksi/1996/2402), [art. 3](https://www.legislation.gov.uk/uksi/1996/2402/article/3) (with [Sch.](https://www.legislation.gov.uk/uksi/1996/2402/schedule))
[^c22802631]: Words in [s. 489(9A)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/9A/a) substituted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/4/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para. 49(a)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/49/a); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c22802611]: Word in [s. 489(9A)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/9A) substituted (with effect in accordance with [s. 117(4)(5)](https://www.legislation.gov.uk/ukpga/1998/36/section/117/4/5) of the amending Act) by [Finance Act 1998 (c. 36)](https://www.legislation.gov.uk/ukpga/1998/36), [Sch. 19 para. 49(b)](https://www.legislation.gov.uk/ukpga/1998/36/schedule/19/paragraph/49/b); [S.I. 1998/3173](https://www.legislation.gov.uk/uksi/1998/3173), [art. 2](https://www.legislation.gov.uk/uksi/1998/3173/article/2)
[^c22805861]: [S. 489](https://www.legislation.gov.uk/ukpga/1988/1/section/489): functions transferred (1.7.1999 with effect in accordance with art. 1(2) of the affecting S.I.) by [The National Assembly for Wales (Transfer of Functions) Order 1999 (S.I. 1999/672)](https://www.legislation.gov.uk/uksi/1999/672), [art. 2](https://www.legislation.gov.uk/uksi/1999/672/article/2), [Sch. 1](https://www.legislation.gov.uk/uksi/1999/672/schedule/1)
[^c23724301]: [S. 489(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/5A) modified (1.12.2008) by [The Transfer of Housing Corporation Functions (Modifications and Transitional Provisions) Order 2008 (S.I. 2008/2839)](https://www.legislation.gov.uk/uksi/2008/2839), [arts. 1(1)](https://www.legislation.gov.uk/uksi/2008/2839/article/1/1), [3](https://www.legislation.gov.uk/uksi/2008/2839/article/3), [Sch. para. 1](https://www.legislation.gov.uk/uksi/2008/2839/schedule/paragraph/1); [S.I. 2008/3068](https://www.legislation.gov.uk/uksi/2008/3068), [arts. 1(2)](https://www.legislation.gov.uk/uksi/2008/3068/article/1/2), [2(1)(b)](https://www.legislation.gov.uk/uksi/2008/3068/article/2/1/b)
[^c22803961]: [S. 489(5A)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/5A/b) and preceding word repealed (1.11.1998) by [Government of Wales Act 1998 (c. 38)](https://www.legislation.gov.uk/ukpga/1998/38), [ss. 140](https://www.legislation.gov.uk/ukpga/1998/38/section/140), [158](https://www.legislation.gov.uk/ukpga/1998/38/section/158), [Sch. 16 para. 57](https://www.legislation.gov.uk/ukpga/1998/38/schedule/16/paragraph/57), [Sch. 18 Pt. 6](https://www.legislation.gov.uk/ukpga/1998/38/schedule/18/part/6); [S.I. 1998/2244](https://www.legislation.gov.uk/uksi/1998/2244), [art. 5](https://www.legislation.gov.uk/uksi/1998/2244/article/5)
[^c23724351]: Words in [s. 489(5A)](https://www.legislation.gov.uk/ukpga/1988/1/section/489/5A) substituted (1.4.2010) by [Housing and Regeneration Act 2008 (c. 17)](https://www.legislation.gov.uk/ukpga/2008/17), [s. 325(1)](https://www.legislation.gov.uk/ukpga/2008/17/section/325/1), [Sch. 9 para. 14](https://www.legislation.gov.uk/ukpga/2008/17/schedule/9/paragraph/14); [S.I. 2010/862](https://www.legislation.gov.uk/uksi/2010/862), [art. 2](https://www.legislation.gov.uk/uksi/2010/862/article/2) (with [Sch.](https://www.legislation.gov.uk/uksi/2010/862/schedule))
[^c22891131]: Words in [s. 500(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/500/4) inserted by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 62(1)(a)](https://www.legislation.gov.uk/ukpga/1990/29/section/62/1/a)
[^c22891151]: Words in [s. 500(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/500/4) substituted by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 62(1)(b)](https://www.legislation.gov.uk/ukpga/1990/29/section/62/1/b)
[^c22891171]: [S. 500(5)-(10)](https://www.legislation.gov.uk/ukpga/1988/1/section/500/5) substituted for s. 500(5) by [Finance Act 1990 (c. 29)](https://www.legislation.gov.uk/ukpga/1990/29), [s. 62(2)](https://www.legislation.gov.uk/ukpga/1990/29/section/62/2)
[^c23728681]: [S. 500(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/section/500/3/b) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 170(2)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/170/2) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23728701]: Words in [s. 500(6)(d)](https://www.legislation.gov.uk/ukpga/1988/1/section/500/6/d) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 170(3)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/170/3) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23728981]: Words in [s. 500(4)(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/500/4/9) substituted (1.4.2010) by [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [s. 118(2)](https://www.legislation.gov.uk/ukpga/2008/9/section/118/2), [Sch. 39 para. 23](https://www.legislation.gov.uk/ukpga/2008/9/schedule/39/paragraph/23); [S.I. 2009/403](https://www.legislation.gov.uk/uksi/2009/403), [art. 2(2)](https://www.legislation.gov.uk/uksi/2009/403/article/2/2)
[^c23731931]: Words in [s. 506B(1)-(4)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/1)(7)(9) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(2)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/2) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732021]: Words in [s. 506B(5)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/5) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(3)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/3) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732041]: Words in [s. 506B(7)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/7) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/4) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23732061]: Words in [s. 506B(8)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/8) substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 97(5)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/97/5) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23733471]: Words in [s. 506B(9)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/9) substituted (1.4.2010) by [Housing and Regeneration Act 2008 (c. 17)](https://www.legislation.gov.uk/ukpga/2008/17), [s. 325(1)](https://www.legislation.gov.uk/ukpga/2008/17/section/325/1), [Sch. 9 para. 15(a)](https://www.legislation.gov.uk/ukpga/2008/17/schedule/9/paragraph/15/a); [S.I. 2010/862](https://www.legislation.gov.uk/uksi/2010/862), [art. 2](https://www.legislation.gov.uk/uksi/2010/862/article/2) (with [Sch.](https://www.legislation.gov.uk/uksi/2010/862/schedule))
[^c23733501]: Words in [s. 506B(9)(a)](https://www.legislation.gov.uk/ukpga/1988/1/section/506B/9/a) inserted (1.4.2010) by [Housing and Regeneration Act 2008 (c. 17)](https://www.legislation.gov.uk/ukpga/2008/17), [s. 325(1)](https://www.legislation.gov.uk/ukpga/2008/17/section/325/1), [Sch. 9 para. 15(b)](https://www.legislation.gov.uk/ukpga/2008/17/schedule/9/paragraph/15/b); [S.I. 2010/862](https://www.legislation.gov.uk/uksi/2010/862), [art. 2](https://www.legislation.gov.uk/uksi/2010/862/article/2) (with [Sch.](https://www.legislation.gov.uk/uksi/2010/862/schedule))
[^c23747961]: Words in [s. 552(13)](https://www.legislation.gov.uk/ukpga/1988/1/section/552/13) omitted (with effect in accordance with Sch. 14 para. 18 of the repealing Act) by virtue of [Finance Act 2008 (c. 9)](https://www.legislation.gov.uk/ukpga/2008/9), [Sch. 14 para. 4(10)](https://www.legislation.gov.uk/ukpga/2008/9/schedule/14/paragraph/4/10)
[^c21616431]: [1939 c. 49](https://www.legislation.gov.uk/ukpga/1939/49).
@@ -44197,6 +43549,10 @@
[^c22891471]: [Sch. 23A para. 2B](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2B) repealed (with effect in accordance with Sch. 6 para. 17(5) of the repealing Act) by [Finance (No. 2) Act 1997 (c. 58)](https://www.legislation.gov.uk/ukpga/1997/58), [Sch. 6 para. 17(4)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/6/paragraph/17/4), [Sch. 8 Pt. 2(11)](https://www.legislation.gov.uk/ukpga/1997/58/schedule/8/part/2/11), Note
[^c23825021]: [Sch. 23A paras. 2A-3A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825041]: [Sch. 23A paras. 2A-3A](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/2A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(4)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/4), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2007/3/schedule/3/part/1) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825631]: [Sch. 23A para. 7A(10)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7A/10): definition of "tax advantage" substituted (6.4.2007 with effect in accordance with [s. 1034(1)](https://www.legislation.gov.uk/ukpga/2007/3/section/1034/1) of the amending Act) by [Income Tax Act 2007 (c. 3)](https://www.legislation.gov.uk/ukpga/2007/3), [Sch. 1 para. 238(7)](https://www.legislation.gov.uk/ukpga/2007/3/schedule/1/paragraph/238/7) (with [Sch. 2](https://www.legislation.gov.uk/ukpga/2007/3/schedule/2))
[^c23825911]: [Sch. 23A para. 7A(10)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7A/10): in definition of "manufactured payment", para. (d) inserted (with effect in accordance with [Sch. 5 para. 9(2)-(4)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/5/paragraph/9/2) of the amending Act) by [Finance Act 2007 (c. 11)](https://www.legislation.gov.uk/ukpga/2007/11), [Sch. 5 para. 9(1)](https://www.legislation.gov.uk/ukpga/2007/11/schedule/5/paragraph/9/1)
@@ -44727,6 +44083,36 @@
[^c23832911]: [Sch. 28A para. 16(1)(f)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/16/1/f) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(10)(e)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/10/e), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/3/part/1) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832471]: Words in [Sch. 28A para. 9(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/9/1) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(5)(a)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/5/a) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832491]: Words in [Sch. 28A para. 9(2)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/9/2/b) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(5)(b)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/5/b) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832511]: Words in [Sch. 28A para. 10(1)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/10/1) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(6)(a)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/6/a) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832531]: Words in [Sch. 28A para. 10(3)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/10/3/b) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(6)(b)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/6/b) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23318601]: Words in [Sch. 28A para. 11(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/1/c) substituted (with effect in accordance with [s. 82(2)](https://www.legislation.gov.uk/ukpga/2002/23/section/82/2) of the amending Act) by [Finance Act 2002 (c. 23)](https://www.legislation.gov.uk/ukpga/2002/23), [Sch. 25 para. 58(6)(b)](https://www.legislation.gov.uk/ukpga/2002/23/schedule/25/paragraph/58/6/b)
[^c23830731]: Words in [Sch. 28A para. 11(1)(a)(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/1/a/3/c) substituted (with effect in accordance with [s. 52(3)](https://www.legislation.gov.uk/ukpga/2005/7/section/52/3) of the amending Act (as amended (retrospectively) by [2005 c. 7](https://www.legislation.gov.uk/ukpga/2005/7), [Sch. 4 para. 50](https://www.legislation.gov.uk/ukpga/2005/7/schedule/4/paragraph/50), [Sch. 11 Pt. 2(7)](https://www.legislation.gov.uk/ukpga/2005/7/schedule/11/part/2/7)) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [Sch. 10 para. 45](https://www.legislation.gov.uk/ukpga/2004/12/schedule/10/paragraph/45)
[^c23830891]: [Sch. 28A para. 11(1)(b)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/1/b) substituted for para. 11(1)(b)(bb) (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 ([S.I. 2004/2310](https://www.legislation.gov.uk/uksi/2004/2310)), art. 2, Sch. para. 39(7)
[^c23832551]: Words in [Sch. 28A para. 11(1)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/1/a) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(7)(a)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/7/a) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832571]: Words in [Sch. 28A para. 11(1)(b)(i)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/1/b/i) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(7)(b)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/7/b) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832591]: Words in [Sch. 28A para. 11(1)(b)(ii)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/1/b/ii) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(7)(c)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/7/c) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832611]: Words in [Sch. 28A para. 11(1)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/1/c) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(7)(d)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/7/d) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832851]: [Sch. 28A para. 11(2)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/2) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(7)(e)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/7/e), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/3/part/1) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832871]: Words in [Sch. 28A para. 11(3)(a)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/3/a) repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(7)(f)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/7/f), [Sch. 3 Pt. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/3/part/1) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832631]: Words in [Sch. 28A para. 11(3)(c)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/11/3/c) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(7)(g)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/7/g) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23832651]: Words in [Sch. 28A para. 12](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/paragraph/12) substituted (1.4.2009 with effect in accordance with [s. 1329(1)](https://www.legislation.gov.uk/ukpga/2009/4/section/1329/1) of the amending Act) by [Corporation Tax Act 2009 (c. 4)](https://www.legislation.gov.uk/ukpga/2009/4), [Sch. 1 para. 290(8)](https://www.legislation.gov.uk/ukpga/2009/4/schedule/1/paragraph/290/8) (with [Sch. 2 Pts. 1](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/1), [2](https://www.legislation.gov.uk/ukpga/2009/4/schedule/2/part/2))
[^c23831111]: [Sch. 28A Pt. 4](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28A/part/4) title substituted (with effect in accordance with [Sch. 7 para. 3(9)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/3/9) of the amending Act) by [Finance (No. 2) Act 2005 (c. 22)](https://www.legislation.gov.uk/ukpga/2005/22), [Sch. 7 para. 3(8)](https://www.legislation.gov.uk/ukpga/2005/22/schedule/7/paragraph/3/8)
[^c22807531]: [Sch. 28B para. 3(2)(aa)](https://www.legislation.gov.uk/ukpga/1988/1/schedule/28B/paragraph/3/2/aa) and preceding word substituted for para. 2(2)(b)(c) (with effect in accordance with [Sch. 9 para. 6](https://www.legislation.gov.uk/ukpga/1997/16/schedule/9/paragraph/6) of the amending Act) by [Finance Act 1997 (c. 16)](https://www.legislation.gov.uk/ukpga/1997/16), [Sch. 9 para. 2(1)](https://www.legislation.gov.uk/ukpga/1997/16/schedule/9/paragraph/2/1)
@@ -45173,579 +44559,579 @@
#### Application of sections 251B and 251C
#### Losses from overseas property business.
#### Relevant loan interest.
#### Income or gains arising from property investment LLP
#### Transfer schemes: transferor
#### Securities.
#### Modifications for change of tax basis
#### Transfers of life assurance business: trade losses of the transferor
#### Equalisation reserves for general business.
#### Further interpretation of sections 135 to 139.
#### Life assurance trade profits advantage: transferee
#### Application of s. 444BA rules to other equalisation reserves.
#### Taxation in respect of other business: incorporated friendly societies qualifying for exemption.
#### Election as to tax exempt business.
#### Taxation of borrower when loan under section 419 released etc
#### Corresponding accounting periods.
#### Certified unit trusts: distributions.
#### Interpretation.
#### Contemplative religious communities: gains exempt from corporation tax
#### Treatment of oil extraction activities etc. for tax purposes.
#### Contemplative religious communities: gains exempt from corporation tax
#### Reduced loss relief for additions to non-profit funds
#### Information: supplementary provisions
#### Cessation of approval: general provisions.
#### Gifts of shares, securities and real property to charities etc
#### Interpretation.
#### Modifications in relation to BLAGAB group reinsurers
#### Income arising under settlement where settlor retains an interest.
#### Long-term business: application of the Corporation Tax Acts.
#### Revocable settlements allowing release of obligation.
#### Deemed manufactured payments in the case of stock lending arrangements.
#### Relevant deposits: computation of tax on interest.
#### Sections 751A and 751AA: supplementary
#### Sale and lease-back.
#### Apportionment of chargeable profits and creditable tax
#### Returns where it is not established whether acceptable distribution policy applies.
#### Transfers of other business
#### Assessment, recovery and postponement of supplementary charge
#### Cases where ss. 502B to 502G do not apply: plant or machinery held as trading stock
#### Certified unit trusts: distributions.
#### Interpretation of credit code.
#### Relief for individuals.
#### Qualifying interests in land held jointly
#### Conditions for approval of retirement benefit schemes.
#### Interpretation.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Interpretation of the Corporation Tax Acts etc.
#### Revocable settlements allowing release of obligation.
#### Charge on profits.
#### The property managing subsidiaries requirement
#### Payments to unmarried minor children of settlor.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Returns where it is not established whether acceptable distribution policy applies.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company with investment business: deductions generally
#### Change in ownership of company carrying on property business.
#### Provision not at arm’s length.
#### Sections 774B and 774D: power to provide further exceptions
#### Sale by individual of income derived from his personal activities.
#### Assets leased to traders and others.
#### Assets leased to traders and others.
#### Qualifying vehicles
#### The approved amount: passenger payments
#### Employment
#### Section 785B: expectation that relevant capital payment will not be paid
#### Restriction of relief for payments of interest.
#### Limits on credit: minimisation of the foreign tax.
#### Reduction of United Kingdom taxes by amount of credit due.
#### Recovery of tax credits incorrectly paid.
#### Recovery of tax credits incorrectly paid.
#### Arrangements to avoid section 812.
#### Disposals and acquisitions of company loan relationships with or without interest.
#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
#### Interest on tax overpaid.
#### Interest on payments in respect of corporation tax and meaning of “the material date".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “UK property business” and “overseas property business”
#### Savings, transitional provisions, consequential amendments and repeals.
#### The approved amount: mileage allowance payments
#### Employment
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provision not at arm’s length.
#### Arrangements to avoid section 812.
#### Conditions for approval of retirement benefit schemes.
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### The prescribed circumstances.
#### Sections 774B and 774D: exceptions
#### Leased assets subject to hire-purchase agreements.
#### Limits on credit: income tax.
#### Foreign tax on items giving rise to a non-trading credit: intangible fixed assets
#### Introduction to section 807C
#### Interest on tax overpaid.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commencement.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in company ownership: postponed corporation tax.
#### Taxation in respect of other business.
#### Loans to participators etc.
#### Dividends paid to investment trusts.
#### Determination of reduced rate for building societies and composite rate for banks etc.
#### Determination of reduced rate for building societies and composite rate for banks etc.
#### Introductory.
#### Returns.
#### Cessation of approval: general provisions.
#### Termination of relief under this Chapter, and transitional provisions.
#### Stock lending.
#### Deemed manufactured payments in the case of stock lending arrangements.
## [SCHEDULE 19A
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Surrender of relief between members of groups and consortia.
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure.
#### Non-resident policies and off-shore capital redemption policies.
#### Gifts of shares, securities and real property to charities etc
#### Relief for individuals.
#### Taxation in respect of other business.
#### Cancellation of corporation tax advantage.
#### Charitable and non-charitable expenditure
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deemed manufactured payments in the case of stock lending arrangements.
#### Imputation of chargeable profits and creditable tax of controlled foreign companies
#### Special rule for computing chargeable profits.
#### Tax credits under Part 1 of Tax Credits Act 2002
#### Rent factoring of leases of plant or machinery
#### Provision not at arm’s length.
#### Tariff receipts and tax-exempt tariffing receipts
#### The Arbitration Convention.
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Interpretation of the Corporation Tax Acts etc.
#### Territorial sea . . . .
#### Interpretation of Income Tax Acts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
#### Qualifying trade, profession or vocation
#### Change in company ownership: postponed corporation tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying vehicles
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deemed interest: cash collateral under stock lending arrangements
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company carrying on property business.
#### Foreign tax on items giving rise to a non-trading credit: intangible fixed assets
#### Dividends paid out of transferred profits.
#### Introduction to section 807E
#### Interpretation of Income Tax Acts.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of price differential on sale and repurchase of securities.
#### Sales etc. at an undervalue or overvalue.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Insurance companies carrying on more than one category of business: restriction of credit.
#### Section 432B apportionment: supplementary provisions.
#### Computation of losses and limitation on relief.
#### Election as to tax exempt business.
#### Definition of insurance company.
#### Exemption for trade unions and employers’ associations.
#### Settlements made after 6th April 1965.
#### Introductory.
#### Interest on tax overpaid.
#### Change in ownership of company with investment business: deductions generally
#### Interpretation of credit code.
#### Insurance companies carrying on more than one category of business: restriction of credit.
#### Disposals and acquisitions of company loan relationships with or without interest.
#### Introduction to section 807E
#### Venture capital trusts.
#### Commencement.
#### Local authorities.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Assets leased to traders and others.
#### Qualifying vehicles
#### The approved amount: passenger payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### About this Schedule
#### Transfers of other business
#### Close companies.
#### Termination of relief under this Chapter, and transitional provisions.
#### Sales etc. at an undervalue or overvalue.
#### Schemes and arrangements designed to increase relief
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Interpretation of the Corporation Tax Acts etc.
#### Interpretation of Income Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Revocable settlements allowing release of obligation.
#### Introduction
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Dividends paid out of transferred profits.
#### Supplement in respect of a post-commencement period
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### Disposals and acquisitions of company loan relationships with or without interest.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### Supplement in respect of a pre-commencement accounting period
#### Onshore pooling.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a pre-commencement accounting period
#### Relief for rent etc. not paid.
#### Disposal or exercise of rights in pursuance of deposits.
#### Employees seconded to charities and educational establishments
#### Payments to trustees of approved profit sharing schemes.
#### Taxation of profit-related pay.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation.
#### Modifications in relation to BLAGAB group reinsurers
#### Election as to tax exempt business.
#### U.K. company distributions not generally chargeable to corporation tax.
#### Discounted bills of exchange.
#### Procedure for making election.
#### Costs of establishing share option or profit sharing schemes: relief.
#### Second loans.
#### Long-term business: application of the Corporation Tax Acts.
#### Company carrying on life assurance business
#### Exemption for trade unions and employers’ associations.
#### Relevant deposits: computation of tax on interest.
#### Reduction in chargeable profits for certain financing income
#### Sale and lease-back.
#### Reduction in chargeable profits: failure to qualify for exemptions
#### Returns where it is not established whether acceptable distribution policy applies.
#### Transfers of other business
#### Assessment, recovery and postponement of supplementary charge
#### Cases where ss. 502B to 502G do not apply: plant or machinery held as trading stock
#### Certified unit trusts: distributions.
#### Exemptions from section 148.
#### Introduction to section 807C
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
#### Interpretation of Income Tax Acts.
#### Venture capital trusts.
#### Interpretation of Income Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restriction on deduction of interest or dividends from trading income.
#### Recovery of tax credits incorrectly paid.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Savings, transitional provisions, consequential amendments and repeals.
#### Qualifying courses of training etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Stock lending.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to inspect documents.
#### Arrangements to avoid section 812.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Income Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “UK property business” and “overseas property business”
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying counselling services etc.
#### Interest on tax overpaid.
#### Interpretation of the Corporation Tax Acts etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of credit code.
#### Relief for individuals.
#### Qualifying interests in land held jointly
#### Conditions for approval of retirement benefit schemes.
#### Interpretation.
#### Section 590: supplementary provisions.
#### Cessation of approval: general provisions.
#### Revocable settlements allowing release of obligation.
#### Charge on profits.
#### The property managing subsidiaries requirement
#### Payments to unmarried minor children of settlor.
#### The prescribed circumstances.
#### Reduction in chargeable profits: failure to qualify for exemptions
#### Introduction
#### Returns where it is not established whether acceptable distribution policy applies.
#### Repayment supplements: companies.
#### Recovery of tax credits incorrectly paid.
#### Interest on tax overpaid.
#### Interest on tax overpaid.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company with investment business: deductions generally
#### Change in ownership of company carrying on property business.
#### Provision not at arm’s length.
#### Sections 774B and 774D: power to provide further exceptions
#### Sale by individual of income derived from his personal activities.
#### Assets leased to traders and others.
#### Assets leased to traders and others.
#### Restriction of relief for payments of interest.
#### The approved amount: passenger payments
#### Employment
#### Section 785B: expectation that relevant capital payment will not be paid
#### Restriction of relief for payments of interest.
#### Limits on credit: minimisation of the foreign tax.
#### Reduction of United Kingdom taxes by amount of credit due.
#### Recovery of tax credits incorrectly paid.
#### Recovery of tax credits incorrectly paid.
#### Arrangements to avoid section 812.
#### Disposals and acquisitions of company loan relationships with or without interest.
#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
#### Interest on tax overpaid.
#### Interpretation of Income Tax Acts.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Interpretation of the Corporation Tax Acts.
#### Interest on payments in respect of corporation tax and meaning of “the material date".
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “UK property business” and “overseas property business”
#### Savings, transitional provisions, consequential amendments and repeals.
#### The approved amount: mileage allowance payments
#### Employment
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Provision not at arm’s length.
#### Ceasing to meet the trading requirement because of administration or receivership
#### Conditions for approval of retirement benefit schemes.
#### Qualifying interests in land held jointly
#### The prescribed circumstances.
#### Sections 774B and 774D: exceptions
#### Leased assets subject to hire-purchase agreements.
#### Limits on credit: income tax.
#### Foreign tax on items giving rise to a non-trading credit: intangible fixed assets
#### Introduction to section 807C
#### Interest on tax overpaid.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commencement.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in company ownership: postponed corporation tax.
#### Equalisation reserves for general business.
#### Loans to participators etc.
#### Old societies.
#### Certified unit trusts: distributions.
#### Determination of reduced rate for building societies and composite rate for banks etc.
#### Losses from overseas property business.
#### Returns.
#### Cessation of approval: general provisions.
#### Termination of relief under this Chapter, and transitional provisions.
#### Revocable settlements allowing release of obligation.
#### Deemed manufactured payments in the case of stock lending arrangements.
## [SCHEDULE 19A
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Surrender of relief between members of groups and consortia.
#### Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure.
#### Sections 434AZA and 434AZB: supplementary
#### Determination of policy holders’ share for purposes of s.438B
#### Taxation in respect of other business.
#### Old societies.
#### Charitable and non-charitable expenditure
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Stock lending.
#### Deemed manufactured payments in the case of stock lending arrangements.
#### Imputation of chargeable profits and creditable tax of controlled foreign companies
#### Special rule for computing chargeable profits.
#### Tax credits under Part 1 of Tax Credits Act 2002
#### Rent factoring of leases of plant or machinery
#### Provision not at arm’s length.
#### Tariff receipts and tax-exempt tariffing receipts
#### The Arbitration Convention.
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Interpretation of the Corporation Tax Acts etc.
#### Territorial sea . . . .
#### Interpretation of Income Tax Acts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
#### Qualifying trade, profession or vocation
#### Change in company ownership: postponed corporation tax.
#### Change in company ownership: corporation tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying vehicles
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Deemed interest: cash collateral under stock lending arrangements
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company carrying on property business.
#### Foreign tax on items giving rise to a non-trading credit: intangible fixed assets
#### Dividends paid out of transferred profits.
#### Introduction to section 807E
#### Interpretation of Income Tax Acts.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Treatment of price differential on sale and repurchase of securities.
#### Sales etc. at an undervalue or overvalue.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Insurance companies carrying on more than one category of business: restriction of credit.
#### Company reconstructions without a change of ownership.
#### Section 432B apportionment: supplementary provisions.
#### Amounts eligible for group relief: trading losses.
#### Definition of insurance company.
#### Exemption for trade unions and employers’ associations.
#### Settlements made after 6th April 1965.
#### Introductory.
#### Interest on tax overpaid.
#### Change in ownership of company with investment business: deductions generally
#### Interpretation of credit code.
#### Insurance companies carrying on more than one category of business: restriction of credit.
#### Disposals and acquisitions of company loan relationships with or without interest.
#### Introduction to section 807E
#### Venture capital trusts.
#### Commencement.
#### Local authorities.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Assets leased to traders and others.
#### Qualifying vehicles
#### The approved amount: passenger payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Close companies.
#### Termination of relief under this Chapter, and transitional provisions.
#### Sales etc. at an undervalue or overvalue.
#### Schemes and arrangements designed to increase relief
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### Interpretation of the Corporation Tax Acts etc.
#### Interpretation of Income Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Revocable settlements allowing release of obligation.
#### Introduction
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Dividends paid out of transferred profits.
#### Supplement in respect of a post-commencement period
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### Disposals and acquisitions of company loan relationships with or without interest.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### Supplement in respect of a pre-commencement accounting period
#### Onshore pooling.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a pre-commencement accounting period
#### Relief for rent etc. not paid.
#### Disposal or exercise of rights in pursuance of deposits.
#### Payments for restrictive undertakings
#### Payments to trustees of approved profit sharing schemes.
#### Interpretation.
#### Relief for necessary expenses.
#### Interpretation.
#### Application of lower rate to company distributions.
#### Discounted bills of exchange.
#### Election by company paying dividend.
#### Costs of establishing share option or profit sharing schemes: relief.
#### Second loans.
#### Taxation in respect of other business.
#### Exemptions from section 148.
#### Introduction to section 807C
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
#### Interpretation of Income Tax Acts.
#### Venture capital trusts.
#### Interpretation of Income Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Restriction on deduction of interest or dividends from trading income.
#### Recovery of tax credits incorrectly paid.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Savings, transitional provisions, consequential amendments and repeals.
#### Qualifying courses of training etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Stock lending.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Mutual agreement procedure and presentation of cases under arrangements.
#### Power to inspect documents.
#### Arrangements to avoid section 812.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Income Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “UK property business” and “overseas property business”
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying counselling services etc.
#### Interest on tax overpaid.
#### Interpretation of the Corporation Tax Acts etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Company vehicles
#### The approved amount: passenger payments
#### Interpretation of credit code.
#### Repayment supplements: companies.
#### Recovery of tax credits incorrectly paid.
#### Interest on tax overpaid.
#### Interest on tax overpaid.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Income Tax Acts.
#### Interpretation of the Tax Acts.
#### Interpretation of Income Tax Acts.
#### Interpretation of the Corporation Tax Acts.
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Employment
#### Tax year
#### Arrangements made under old law.
#### Interest on payments in respect of corporation tax and meaning of “the material date".
@@ -45957,1068 +45343,1068 @@
For the purposes of this Schedule a car is available to an employee at a particular time if it is then made available, by reason of his employment and without any transfer of the property in it, either to him or to others being members of his family or household.
#### About this Schedule
#### Repayment supplements: companies.
#### Territorial sea and designated areas.
#### Costs of establishing share option or profit sharing schemes: relief.
#### Approved share incentive plans
#### Life assurance premiums paid by employer
#### Interest which never has been relevant loan interest etc.
#### Apportionment of income and gains.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is neither an authorised unit trust nor an umbrella scheme ; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*”means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (6A) In this section “*umbrella scheme*” has the same meaning as in section 468.
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is not an authorised unit trust; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*” has the same meaning as in section 468, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Commencement.
#### Reduction in chargeable profits following an exempt period
#### The approved amount: passenger payments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Recovery of tax credits incorrectly paid.
#### Territorial sea and designated areas.
#### Interpretation of the Corporation Tax Acts etc.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### How averaging claim is given effect
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying policies.
#### Life assurance premiums paid by employer
#### Eligibility for relief.
#### Substitution of security: supplemental.
#### UK property business losses
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER 1B — PROVISIONS AS TO CAPITAL SUMS PAID TO SETTLOR
### CHAPTER 1C — LIABILITY OF TRUSTEES
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
#### Interpretation of the Corporation Tax Acts etc.
#### Introduction
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
#### Introduction
#### Introduction
## Part IV — Disallowed debits and non-trading deficits
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying vehicles
#### Employment
#### The approved amount: mileage allowance payments
#### Charitable donations: contributions to agent’s expenses.
#### Relief where borrower deceased.
#### Eligibility for relief.
#### Early conversion or surrender of life policies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Manufactured dividends and interest.
#### Section 751A: supplementary
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Employment
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on tax overpaid.
#### Transfers of rights to receive distributions in respect of shares
#### Offshore income gains: application of transfer of assets abroad provisions
#### Qualifying trade, profession or vocation
#### How averaging claim is given effect
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: mileage allowance payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Indexation of amounts in sections 256B, 257, 257A and 257AB.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “UK property business” and “overseas property business”
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Interest on tax overpaid.
#### Section 751A: supplementary
#### Introduction
#### Adjustment of profits on averaging claim
#### Tax year
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Manufactured interest on UK securities: general
### Manufactured interest on gilt-edged securities etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Substitution of security: supplemental.
#### Dealings in commodity futures etc: withdrawal of loss relief.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a pre-commencement accounting period
#### Section 796: trade income
#### Mutual agreement procedure and presentation of cases under arrangements.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Utilisation of eligible unrelieved foreign tax.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commencement.
#### Interpretation of the Corporation Tax Acts etc.
#### Meaning of “UK property business” and “overseas property business”
#### Income treated as arising under section 761(1): remittance basis
#### Change in company ownership: postponed corporation tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sales etc. at an undervalue or overvalue.
#### Section 785B: expectation that relevant capital payment will not be paid
#### Company vehicles
#### Introduction
#### The approved amount: mileage allowance payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Repayment supplements: companies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company with unused non-trading loss on intangible fixed assets
#### Sales etc. at an undervalue or overvalue.
#### Restriction of relief for payments of interest.
#### Tax year
#### Company vehicles
#### Employment
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Relevant loan interest.
#### Second loans.
#### Loans to participators etc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Employment
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Territorial sea and designated areas.
#### Costs of establishing share option or profit sharing schemes: relief.
#### Approved share incentive plans
#### Elections as to transfer of relief under section 257A or 257AB.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of Income Tax Acts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Introduction
### Introductory
### Payments and other benefits to which section 148 applies
### Payments and other benefits excluded from charge under section 148
### Application of £30,000 threshold
### Exclusion or reduction of charge in case of foreign service
### Valuation of benefits
### Notional interest treated as paid if amount charged in respect of beneficial loan
### Giving effect to the charge to tax
### Reporting requirements
### Interpretation
#### Qualifying vehicles
#### The approved amount: passenger payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a post-commencement period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Liability of non-transferors.
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Company vehicles
#### Introduction
#### Supplement in respect of a pre-commencement accounting period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to modify sections 727A, 730A, 730BB and 737A to 737C
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax year
#### Accounting periods
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Trading stock.
#### VAT penalties etc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The appropriate percentage
### Car with CO2 emissions figure
### The lower threshold
### Bi-fuel cars
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### The non-qualifying pool
#### Supplement in respect of a pre-commencement accounting period
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest: special relationship.
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amount of post-commencement supplement for a post-commencement period
#### Qualifying companies
#### The non-qualifying pool
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### Amount of post-commencement supplement for a post-commencement period
#### Supplement in respect of a pre-commencement accounting period
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Close companies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a pre-commencement accounting period
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in company ownership: corporation tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest which never has been relevant loan interest etc.
#### Apportionment of income and gains.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is neither an authorised unit trust nor an umbrella scheme ; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*”means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (6A) In this section “*umbrella scheme*” has the same meaning as in section 468.
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
##### 469
- (1) This section applies to—
- (a) any unit trust scheme that is not an authorised unit trust; and
- (b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,
except where the trustees of the scheme are not resident in the United Kingdom.
- (2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
- (3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
- (4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
- (5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
- (a) the date so provided is more than 12 months after the end of the period; or
- (b) no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
- (5A) Subsection (5B) below applies where for any year of assessment—
- (a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
- (b) there is an uncredited surplus in the case of the scheme.
- (5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
- (a) if the surplus is greater than that amount, to nil, or
- (b) if it is not, by an amount equal to the surplus.
- (5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
- (a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
- (b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
- (c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
- (5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.
- (6) In this section “*distribution period*” has the same meaning as in section 468, but—
- (a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
- (b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
- (7) In this section “*unit trust scheme*” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
- (8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
- (9) Sections 686 and 687 shall not apply to a scheme to which this section applies.
- (10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
- (11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Commencement.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits following an exempt period
#### Reduction in chargeable profits following an exempt period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to inspect documents.
#### The Arbitration Convention.
#### About this Schedule
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The non-qualifying pool
#### About this Schedule
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Qualifying companies
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### The non-qualifying pool
#### About this Schedule
#### Accounting periods
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Gross rate” and “gross amount” of distributions to include ACT.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Recovery of tax credits incorrectly paid.
#### Territorial sea and designated areas.
#### Interpretation of the Corporation Tax Acts etc.
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Children’s tax credit.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Qualifying companies
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### Losses from UK property business.
#### Apportionment of certain income, deductions and interest.
#### Interpretative provisions relating to insurance companies.
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses of ring fence trade: set off against profits of an earlier accounting period
#### Close companies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Company carrying on life assurance business
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “research and development”.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### How averaging claim is given effect
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Transfer of relief under section 257A.
#### Life assurance premiums paid by employer
#### Qualifying policies.
#### Section 209(3AA): link to shares of company or associated company
#### Elections as to transfer of relief under section 257A or 257AB.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### CHAPTER 1B — PROVISIONS AS TO CAPITAL SUMS PAID TO SETTLOR
### CHAPTER 1C — LIABILITY OF TRUSTEES
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.
#### Interpretation of the Corporation Tax Acts etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a pre-commencement accounting period
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Adjustment of profits on averaging claim
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
#### Introduction
#### Introduction
## Part IV — Disallowed debits and non-trading deficits
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying vehicles
#### Employment
#### The approved amount: mileage allowance payments
#### Charitable donations: contributions to agent’s expenses.
#### Interest etc. paid in respect of certain securities.
#### Eligibility for relief.
#### Early conversion or surrender of life policies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Manufactured dividends and interest.
#### Section 751A: supplementary
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Employment
#### Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.
#### Arrangements to avoid section 812.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Application of Income Tax Acts to public departments and avoidance of exempting provisions.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest on tax overpaid.
#### Transfers of rights to receive distributions in respect of shares
#### Offshore income gains: application of transfer of assets abroad provisions
#### Qualifying trade, profession or vocation
#### How averaging claim is given effect
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: mileage allowance payments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Meaning of “industrial assurance business”
##### 20A
In this Part of this Schedule “*industrial assurance business*” means any industrial assurance business within the meaning given by—
- (a) section 1(2) of the Industrial Assurance Act 1923, or
- (b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,
which was carried on before 1 December 2001.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Indexation of amounts in sections 256B, 257, 257A and 257AB.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Meaning of “UK property business” and “overseas property business”
#### Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)
#### Interest on tax overpaid.
#### Section 751A: supplementary
#### Introduction
#### Adjustment of profits on averaging claim
#### Tax year
#### Company carrying on life assurance business
#### Section 432B apportionment: value of non-participating funds.
#### Loan to buy machinery or plant.
#### UK property business or overseas property business
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### Manufactured interest on UK securities: general
### Manufactured interest on gilt-edged securities etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Substitution of security: supplemental.
#### UK property business losses
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of credit code.
#### Section 796: trade income
#### Mutual agreement procedure and presentation of cases under arrangements.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Utilisation of eligible unrelieved foreign tax.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Commencement.
#### Interpretation of the Corporation Tax Acts etc.
#### Meaning of “UK property business” and “overseas property business”
#### Income treated as arising under section 761(1): remittance basis
#### Change in company ownership: postponed corporation tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Sales etc. at an undervalue or overvalue.
#### Section 785B: expectation that relevant capital payment will not be paid
#### Company vehicles
#### Introduction
#### The approved amount: mileage allowance payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Repayment supplements: companies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in ownership of company with unused non-trading loss on intangible fixed assets
#### Sales etc. at an undervalue or overvalue.
#### Restriction of relief for payments of interest.
#### Tax year
#### Company vehicles
#### Employment
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Relief where borrower deceased.
#### Restrictions on the use of tax credits by pension funds.
#### Form of relief.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Employment
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Territorial sea and designated areas.
#### Interpretation of the Corporation Tax Acts.
#### Interpretation of Income Tax Acts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Introduction
### Introductory
### Payments and other benefits to which section 148 applies
### Payments and other benefits excluded from charge under section 148
### Application of £30,000 threshold
### Exclusion or reduction of charge in case of foreign service
### Valuation of benefits
### Notional interest treated as paid if amount charged in respect of beneficial loan
### Giving effect to the charge to tax
### Reporting requirements
### Interpretation
#### Qualifying vehicles
#### The approved amount: passenger payments
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a post-commencement period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Liability of non-transferors.
#### Exemption from sections 739 and 740 (transactions before 5th December 2005)
#### Company vehicles
#### Introduction
#### Supplement in respect of a pre-commencement accounting period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to modify sections 727A, 730A, 730BB and 737A to 737C
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Tax year
#### Accounting periods
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Foreign tax on items giving rise to a non-trading credit: intangible fixed assets
#### Interest on payments in respect of corporation tax and meaning of “the material date".
#### Trading stock.
#### VAT penalties etc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The appropriate percentage
### Car with CO2 emissions figure
### The lower threshold
### Bi-fuel cars
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### The non-qualifying pool
#### Supplement in respect of a pre-commencement accounting period
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interest: special relationship.
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amount of post-commencement supplement for a post-commencement period
#### Qualifying companies
#### The non-qualifying pool
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### Amount of post-commencement supplement for a post-commencement period
#### Supplement in respect of a pre-commencement accounting period
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses of ring fence trade: set off against profits of an earlier accounting period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a pre-commencement accounting period
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Change in company ownership: corporation tax.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### No tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Reduction in chargeable profits following an exempt period
#### Reduction in chargeable profits following an exempt period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Power to inspect documents.
#### The Arbitration Convention.
#### About this Schedule
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The non-qualifying pool
#### About this Schedule
#### About this Schedule
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### Qualifying companies
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### The non-qualifying pool
#### About this Schedule
#### Accounting periods
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### “Gross rate” and “gross amount” of distributions to include ACT.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Adjustment of profits on averaging claim
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### About this Schedule
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The approved amount: passenger payments
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Children’s tax credit.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Interpretation of the Corporation Tax Acts.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### Qualifying companies
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Accounting periods
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### Transfer of relief under section 257A where relief exceeds income or 257AB.
#### Dealings in commodity futures etc: withdrawal of loss relief.
#### Loans to participators etc.
#### Supplement in respect of a pre-commencement accounting period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### Amount of post-commencement supplement for a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Supplement in respect of a post-commencement period
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Losses from UK property business.
#### Close companies.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Exceptions from section 419.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying companies
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Introduction
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 468A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
#### Qualifying trade, profession or vocation
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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#### About this Schedule
#### About this Schedule
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#### Meaning of “research and development”.
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#### How averaging claim is given effect
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#### About this Schedule
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#### The pool of qualifying E&A losses and the pool of non-qualifying losses
#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
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#### Qualifying trade, profession or vocation
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#### Supplement in respect of a pre-commencement accounting period
#### Amount of post-commencement supplement for a post-commencement period
#### The non-qualifying pool
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#### Introduction
#### Adjustment of profits on averaging claim
#### About this Schedule
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### Meaning of “industrial assurance business”
##### 20A
In this Part of this Schedule “*industrial assurance business*” means any industrial assurance business within the meaning given by—
- (a) section 1(2) of the Industrial Assurance Act 1923, or
- (b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,
which was carried on before 1 December 2001.
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#### The mixed pool of qualifying E&A expenditure and supplement previously allowed
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#### Company carrying on life assurance business
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#### Loan to buy machinery or plant.
#### UK property business or overseas property business
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@@ -47063,7 +46449,7 @@
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#### Tax on companies in administration
#### Election that assets not be foreign business assets
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@@ -47204,3 +46590,7 @@
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2010-04-01
Income and Corporation Taxes Act 1988
2009-12-01
Income and Corporation Taxes Act 1988
2009-11-11
Income and Corporation Taxes Act 1988
2009-10-01
Income and Corporation Taxes Act 1988
2009-09-01
Income and Corporation Taxes Act 1988
2009-08-13
Income and Corporation Taxes Act 1988
2009-07-21
Income and Corporation Taxes Act 1988
2009-06-01
Income and Corporation Taxes Act 1988
2009-04-23
Income and Corporation Taxes Act 1988
2009-04-22
Income and Corporation Taxes Act 1988
2009-04-06
Income and Corporation Taxes Act 1988
2009-04-01
Income and Corporation Taxes Act 1988
2009-02-21
Income and Corporation Taxes Act 1988
2009-02-03
Income and Corporation Taxes Act 1988
2009-01-01
Income and Corporation Taxes Act 1988
2008-12-27
Income and Corporation Taxes Act 1988
2008-12-01
Income and Corporation Taxes Act 1988
2008-10-29
Income and Corporation Taxes Act 1988
2008-10-28
Income and Corporation Taxes Act 1988
2008-09-08
Income and Corporation Taxes Act 1988
2008-08-12
Income and Corporation Taxes Act 1988
2008-07-22
Income and Corporation Taxes Act 1988
2008-07-21
Income and Corporation Taxes Act 1988
2008-07-08
Income and Corporation Taxes Act 1988
2008-07-01
Income and Corporation Taxes Act 1988
2008-04-06
Income and Corporation Taxes Act 1988
2008-04-01
Income and Corporation Taxes Act 1988
2008-02-19
Income and Corporation Taxes Act 1988
2008-01-03
Income and Corporation Taxes Act 1988
2008-01-01
Income and Corporation Taxes Act 1988
2007-12-28
Income and Corporation Taxes Act 1988
2007-12-27
Income and Corporation Taxes Act 1988
2007-12-06
Income and Corporation Taxes Act 1988
2007-11-29
Income and Corporation Taxes Act 1988
2007-10-01
Income and Corporation Taxes Act 1988
2007-09-01
Income and Corporation Taxes Act 1988
2007-08-14
Income and Corporation Taxes Act 1988
2007-08-13
Income and Corporation Taxes Act 1988
2007-07-19
Income and Corporation Taxes Act 1988
2007-07-17
Income and Corporation Taxes Act 1988
2007-04-17
Income and Corporation Taxes Act 1988
2007-04-06
Income and Corporation Taxes Act 1988
2007-04-01
Income and Corporation Taxes Act 1988
2007-03-29
Income and Corporation Taxes Act 1988
2007-03-21
Income and Corporation Taxes Act 1988
2007-03-01
Income and Corporation Taxes Act 1988
2007-01-08
Income and Corporation Taxes Act 1988
2007-01-01
Income and Corporation Taxes Act 1988
2006-12-31
Income and Corporation Taxes Act 1988
2006-12-26
Income and Corporation Taxes Act 1988
2006-12-12
Income and Corporation Taxes Act 1988
2006-12-06
Income and Corporation Taxes Act 1988
2006-08-11
Income and Corporation Taxes Act 1988
2006-07-19
Income and Corporation Taxes Act 1988
2006-06-09
Income and Corporation Taxes Act 1988
2006-04-06
Income and Corporation Taxes Act 1988
2006-04-01
Income and Corporation Taxes Act 1988
2006-03-22
Income and Corporation Taxes Act 1988
2006-01-06
Income and Corporation Taxes Act 1988
2005-12-27
Income and Corporation Taxes Act 1988
2005-12-05
Income and Corporation Taxes Act 1988
2005-11-01
Income and Corporation Taxes Act 1988
2005-10-05
Income and Corporation Taxes Act 1988
2005-09-27
Income and Corporation Taxes Act 1988
2005-08-12
Income and Corporation Taxes Act 1988
2005-08-11
Income and Corporation Taxes Act 1988
2005-08-03
Income and Corporation Taxes Act 1988
2005-07-24
Income and Corporation Taxes Act 1988
2005-07-20
Income and Corporation Taxes Act 1988
2005-06-08
Income and Corporation Taxes Act 1988
2005-04-07
Income and Corporation Taxes Act 1988
2005-04-06
Income and Corporation Taxes Act 1988
original version
Text at this date