Finance Act 2012

Transfers to HMRC under Agreement

26A

• (1) Income or chargeable gains of a person are to be treated as not remitted to the United Kingdom if conditions A to D are met.

• (2) Condition A is that (but for sub-paragraph (1)) the income or gains would be regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom.

• (3) Condition B is that the money is brought to the United Kingdom pursuant to a transfer made to HMRC in accordance with the Agreement.

• (4) Condition C (which applies only if the money brought to the United Kingdom is a sum levied under Article 19(2)(b)) is that the sum was levied within the period of 45 days beginning with the day on which the amount derived from the income or gain in question was remitted as mentioned in Article 19(2)(b).

• (5) Condition D is that the transfer is made in relation to a tax year in which section 809B, 809D or 809E of ITA 2007 (application of remittance basis) applies to the person.

• (6) Sub-paragraph (1) does not apply in relation to money brought to the United Kingdom if or to the extent that—

• (a) paragraph 18(2), or section 138(4)(a) or 140(5)(a) of TIOPA 2010, is applied in relation to it (set-off against other tax liabilities), or

• (b) it is repaid or refunded by HMRC.

26B

• (1) This paragraph applies if—

• (a) but for paragraph 26A(1), income or chargeable gains would have been regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom, and

• (b) section 809Q of ITA 2007 (transfers from mixed funds) would have applied in determining the amount that would have been so remitted.

• (2) The bringing of the money to the United Kingdom counts as an offshore transfer for the purposes of section 809R(4) of ITA 2007 (composition of mixed fund).

32A

• (1) This paragraph applies where a person (“the donor”) makes a qualifying gift of an object in circumstances where, had the donor instead sold the object to an individual at market value, a charge to estate duty would have arisen under section 40 of FA 1930 on the proceeds of sale.

• (2) At the time when the gift is made, estate duty becomes chargeable under that section as if the gift were such a sale (subject to any limitation imposed by paragraph 33(2)).

• (3) In the application of this paragraph to Northern Ireland, the references to section 40 of FA 1930 are to be read as references to section 2 of the Finance Act (Northern Ireland) 1931.

35A

• (1) Sub-paragraph (2) applies to assets which by reason of paragraph 35 (or the previous application of this paragraph) are regarded for the purposes of this Part as assets forming part of the long-term business fixed capital of a company (“company A”).

• (2) Where—

• (a) company A transfers all of its basic life assurance and general annuity business and non-BLAGAB business to another company (“company B”), and

• (b) the transfer is a relevant intra-group transfer,

for the purposes of this Part the assets form part of the long-term business fixed capital of company B instead of company A.

• (3) “Relevant intra-group transfer” has the same meaning for the purposes of this paragraph as it has for the purposes of paragraph 13.

Meaning of “income”

Application of Chapter

Deduction for current policyholder tax

Overview

Controlled foreign companies and foreign permanent establishments

Transfers within a group by companies carrying on ring fence trade

Supplementary charge

Relief in respect of decommissioning expenditure

Rates of tobacco products duty

Repeal of drawback on British compounds and spirits of wine

Changes to the categorisation of supplies

Relief from VAT on low value goods: restriction relating to Channel Islands

Group supplies using an overseas member

Face-value vouchers

Standard rate of landfill tax

Landfill sites in Scotland

Gifts to charities etc

The bank levy

Agreement between UK and Switzerland

Tax agents: dishonest conduct

PAYE regulations: information

Interpretation

Meaning of “life assurance business”

Meaning of “BLAGAB chargeable gains” etc

124A

• (1) This section applies if—

• (a) an insurance company carrying on basic life assurance and general annuity business makes a BLAGAB trade loss for an accounting period beginning on or after 1 April 2017 (“the loss-making period”),

• (b) relief under—

• section 37 of CTA 2010 (as applied by section 123), or

• Part 5 of CTA 2010 (group relief) (as applied by section 125),

is not given for an amount of the loss (“the unrelieved amount”), and

• (c) the company continues to carry on basic life assurance and general annuity business in the next accounting period (“the later period”).

• (2) The unrelieved amount is carried forward to the later period.

• (3) Relief for the unrelieved amount is given to the company in the later period if the company has a BLAGAB trade profit for the later period.

• (4) The relief is given as set out in subsection (5).

• (5) For the purposes of—

• (a) section 93 (minimum profits charge), and

• (b) section 104 (policyholders' rate of tax),

the BLAGAB trade profit of the later period is reduced by the unrelieved amount ....

• (6) Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts.

124B

• (1) This section applies if—

• (a) an amount of an insurance company's BLAGAB trade loss for an accounting period is carried forward to an accounting period of the company (“the later period”) under section 124A(2) or 124C(3), and

• (b) any of that amount (“the unrelieved amount”) is not deducted under section 124A(5) or 124C(6) (as the case may be) from the company's BLAGAB trade profit (if any) of the later period.

• (2) The company may make a claim for relief to be given for the unrelieved amount under this section.

• (3) If the company makes a claim, the relief is given by deducting the unrelieved amount, or any part of it specified in the claim, from the company's total profits of the later period.

• (4) But (if the company is a Solvency 2 insurance company)—

• (a) the company may not make a claim under this section if the unrelieved amount is wholly a shock loss, and

• (b) the company may not make a claim specifying a part of the unrelieved amount if that part is (to any extent) a shock loss.

• (5) For the purposes of subsection (4) assume that in any use by the company of the BLAGAB trade loss for relief under—

• (a) section 37 of CTA 2010 (as applied by section 123),

• (b) Part 5 of CTA 2010 (as applied by section 125), or

• (c) section 124A(5) or 124C(6),

any part of it that is a shock loss is used before any part of it that is not a shock loss.

• (6) A claim under this section must be made—

• (a) within the period of two years after the end of the later period, or

• (b) within such further period as an officer of Revenue and Customs may allow.

• (7) Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts.

• (8) In this section—

• “Solvency 2 insurance company” means an insurance undertaking, a reinsurance undertaking or a third-country insurance undertaking;

• “insurance undertaking” has the meaning given in Article 13(1) of the Solvency 2 Directive;

• “reinsurance undertaking” has the meaning given in Article 13(4) of the Solvency 2 Directive;

• “Solvency 2 Directive” means Directive 2009/138/EC of the European Parliament and the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II);

• “shock loss” has the meaning given by section 269ZK of CTA 2010;

• “third-country insurance undertaking” means an undertaking that has received authorisation under Article 162 of the Solvency 2 Directive from the Prudential Regulation Authority or the Financial Conduct Authority.

124C

• (1) This section applies if—

• (a) an amount of an insurance company's BLAGAB trade loss for an accounting period is carried forward to an accounting period (“the later period”) of the company under section 124A(2) or subsection (3) of this section,

• (b) any of that amount is unrelieved in the later period, and

• (c) the company continues to carry on basic life assurance and general annuity business in the accounting period (“the further period”) after the later period.

• (2) An amount carried forward as mentioned in subsection (1)(a) is “unrelieved in the later period” so far as it is not—

• (a) deducted under section 124A(5) or subsection (6) of this section from the company's BLAGAB trade profit (if any) of the later period,

• (b) deducted from the company's total profits of the later period on a claim under 124B, or

• (c) surrendered by way of group relief for carried-forward losses under Part 5A of CTA 2010.

• (3) So much of the amount mentioned in subsection (1)(a) as is unrelieved in the later period is carried forward to the further period.

• (4) Relief for the amount carried forward under subsection (3) (“the remaining carried forward amount”) is given to the company in the further period if the company has a BLAGAB trade profit for that period.

• (5) The relief is given as set out in subsection (6).

• (6) For the purposes of—

• (a) section 93 (minimum profits charge), and

• (b) section 104 (policyholders' rate of tax),

the BLAGAB trade profit of the further period is reduced by the remaining carried forward amount ....

• (7) Relief under this section is subject to restriction or modification in accordance with section 137(7) of CTA 2010 and other applicable provisions of the Corporation Tax Acts.

124D

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124E

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130A

• (1) This section applies to a re-insurer in relation to the re-insurance of the whole, or part of, a cedant’s basic life assurance and general annuity business, if—

• (a) the business is not excluded business for the purposes of section 57(2)(e), and

• (b) it is reasonable to suppose that the arrangements for the re-insurance are made, or are operated, in connection with an insurance business transfer scheme under which the business will be transferred to the re-insurer or a person connected with the re-insurer.

• (2) Where the arrangements are operated, but were not made, in connection with the insurance business transfer scheme, this section is to apply to the re-insurer from the later of—

• (a) the beginning of the accounting period in which it is reasonable to suppose that the arrangements were first operated in connection with the transfer, and

• (b) 15 December 2022.

• (3) Where this section applies in relation to re-insurance, that re-insurance (so far as it is of basic life assurance and general annuity business) is to be treated as excluded business for the purposes of section 57(2)(e) (and that business is referred to in this section as “the re-insured business”).

• (4) Accordingly—

• (a) the re-insured business is, or forms part of, the separate basic life assurance and general annuity business of the re-insurer (see section 66(2)), and

• (b) accounting profit or loss and the tax adjustments (within the meaning of section 114(4)) referable to the re-insured business are, for the purposes of provision made by or under this Part or Schedule 5 to FA 2022, to be allocated to the basic life assurance and general annuity business.

• (5) But, subject to subsection (6), no amount referable to the re-insured business is to be included in the determination of the I-E profit of the re-insurer for an accounting period (and accordingly, subject to that subsection, the I-E profit referable to that business for the accounting period will be nil).