|
| |
|
155 | Meaning of “exempt” BLAGAB or eligible PHI business |
| |
(1) | In this Part “exempt” BLAGAB or eligible PHI business means BLAGAB or |
| |
eligible PHI business other than non-qualifying business. |
| |
(2) | Business is “non-qualifying” so far as it consists of— |
| |
(a) | the assurance of gross sums, or the granting of annuities, which meet |
| 5 |
the conditions set out in the following table (which vary according to |
| |
the date on which the contracts in question were made), or |
| |
(b) | the effecting or carrying out of contracts for the assurance of gross sums |
| |
which are made on or after 20 March 1991 and which are expressed at |
| |
the outset not to be made in the course of exempt BLAGAB or eligible |
| 10 |
| |
(3) | This is the table mentioned above— |
| |
| | | | | | | assurance or annuities relate |
| | | | | | | | | | 15 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25 | | after 1 September 1990 but |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 30 | | after 1 September 1987 but |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 35 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40 |
|
(4) | In applying the limits in the above table in relation to the total premiums |
| |
payable in any period of 12 months (in the case of contracts made on or after 1 |
| |
| |
|
| |
|
| |
|
(a) | if the premiums are payable more frequently than annually, ignore an |
| |
amount equal to 10% of the premiums, and |
| |
(b) | ignore so much of any premium as is charged on the ground that an |
| |
exceptional risk of death or disability is involved. |
| |
(5) | In applying the limits in the above table in the case of contracts made on or after |
| 5 |
1 September 1987, ignore any bonus or addition declared upon an annuity. |
| |
(6) | In applying the limits in the above table in the case of contracts made before 1 |
| |
September 1987, ignore any bonus or addition which— |
| |
(a) | is declared upon the assurance of a gross sum or annuity, or |
| |
(b) | accrues upon the assurance of a gross sum or annuity by reference to an |
| 10 |
increase in the value of any investments. |
| |
(7) | In the case of a contract for the assurance of a gross sum under exempt |
| |
BLAGAB or eligible PHI business made on or after 1 September 1987 but before |
| |
1 May 1995, there is a special rule if the amount payable by way of premium |
| |
under the contract is increased as a result of a variation made— |
| 15 |
(a) | in the period beginning with 25 July 1991 and ending with 31 July 1992, |
| |
| |
(b) | in the period beginning with 1 May 1995 and ending with 31 March |
| |
| |
(8) | The rule is that, in relation to any profits relating to the contract as varied, the |
| 20 |
contract is to be treated for the purposes of the above table as made at the time |
| |
| |
156 | Societies with no provision for assuring gross sums exceeding £2,000 etc |
| |
(1) | This section applies to a friendly society if its rules make no provision for it to |
| |
carry on BLAGAB or eligible PHI business, or other long-term business, |
| 25 |
| |
(a) | the assurance of gross sums exceeding £2,000, or |
| |
(b) | the granting of annuities of annual amounts exceeding £416. |
| |
(2) | The table in section 155 applies in relation to a friendly society to which this |
| |
section applies as if, in the final row of that table— |
| 30 |
(a) | the reference to £500 were a reference to £2,000, and |
| |
(b) | the reference to £104 were a reference to £416. |
| |
(3) | If at any time a friendly society to which this section applies amends its rules |
| |
so as to cease to be such a friendly society, any part of its BLAGAB or eligible |
| |
| 35 |
(a) | relates to contracts made before that time, and |
| |
(b) | immediately before that time was exempt BLAGAB or eligible PHI |
| |
| |
| continues to be exempt BLAGAB or eligible PHI business for the purposes of |
| |
| 40 |
(4) | If at any time a friendly society to which this section does not apply amends its |
| |
rules so as to become a friendly society to which this section applies, any part |
| |
of its BLAGAB or eligible PHI business which— |
| |
(a) | relates to contracts made before that time, and |
| |
(b) | immediately before that time was not exempt BLAGAB or eligible PHI |
| 45 |
| |
|
| |
|
| |
|
| continues not to be exempt BLAGAB or eligible PHI business for the purposes |
| |
| |
(5) | If at any time a friendly society to which this section does not apply acquires |
| |
by way of transfer of engagements or amalgamation from another friendly |
| |
society any BLAGAB or eligible PHI business which— |
| 5 |
(a) | relates to contracts made before that time, and |
| |
(b) | immediately before that time was exempt BLAGAB or eligible PHI |
| |
| |
| that business continues to be exempt BLAGAB or eligible PHI business for the |
| |
| 10 |
(6) | If at any time a friendly society to which this section applies acquires by way |
| |
of transfer of engagements or amalgamation from another friendly society any |
| |
BLAGAB or eligible PHI business which— |
| |
(a) | relates to contracts made before that time, and |
| |
(b) | immediately before that time was not exempt BLAGAB or eligible PHI |
| 15 |
| |
| that business continues not to be exempt BLAGAB or eligible PHI business for |
| |
the purposes of this Part. |
| |
157 | Transfers to friendly societies |
| |
(1) | If at any time an insurance business transfer scheme transfers any long-term |
| 20 |
business to a friendly society, any BLAGAB or eligible PHI business which |
| |
relates to contracts included in the transfer is subsequently not to be capable of |
| |
being exempt BLAGAB or eligible PHI business for the purposes of this Part. |
| |
(2) | This rule does not apply in relation to business relating to contracts to which |
| |
section 158 applied immediately before the transfer had effect. |
| 25 |
158 | Transfers from friendly societies to insurance companies etc |
| |
(1) | If at any time an insurance company acquires by way of transfer of |
| |
engagements from a friendly society any BLAGAB or eligible PHI business |
| |
| |
(a) | relates to contracts made before that time, and |
| 30 |
(b) | immediately before that time was exempt BLAGAB or eligible PHI |
| |
| |
| that business continues to be exempt from corporation tax (whether on income |
| |
or chargeable gains) on profits arising from it. |
| |
(2) | If at any time a friendly society ceases as a result of section 91 of FSA 1992 |
| 35 |
(conversion into company) to be registered under that Act, any part of its |
| |
BLAGAB or eligible PHI business which— |
| |
(a) | relates to contracts made before that time, and |
| |
(b) | immediately before that time was exempt BLAGAB or eligible PHI |
| |
| 40 |
| continues to be exempt from corporation tax (whether on income or chargeable |
| |
gains) on profits arising from it. |
| |
(3) | If contracts constituting or forming part of the business of a company covered |
| |
by this section are varied during an accounting period of the company so as to |
| |
increase the premiums payable under them, the business relating to those |
| 45 |
|
| |
|
| |
|
contracts is not exempt from corporation tax for that or any subsequent |
| |
| |
(4) | For the purposes of the Corporation Tax Acts any part of a company’s business |
| |
which is exempt from corporation tax as a result of this section is to be treated |
| |
as a separate business from any other business carried on by the company. |
| 5 |
(5) | The Treasury may by regulations provide that, where any part of the business |
| |
of a company is exempt from corporation tax as a result of this section, the |
| |
Corporation Tax Acts have effect subject to such exceptions or other |
| |
modifications as they consider appropriate. |
| |
(6) | The regulations may make provision having retrospective effect. |
| 10 |
| |
(a) | make different provision for different cases or circumstances, and |
| |
(b) | contain incidental, supplementary, consequential, transitional, |
| |
transitory or saving provision. |
| |
159 | Exception in case of breach of maximum benefits payable to members |
| 15 |
(1) | The exemption from corporation tax afforded by section 153, 156(3) or (5) or |
| |
158 does not apply 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 |
| |
| |
(a) | is not a qualifying policy as a result of sub-paragraph (2) of paragraph |
| 20 |
6 of Schedule 15 to ICTA and is not an excluded policy, and |
| |
(b) | would not be a qualifying policy as a result of that sub-paragraph if all |
| |
excluded policies were ignored. |
| |
(2) | A policy is an excluded policy if— |
| |
(a) | it is held otherwise than with the friendly society or insurance |
| 25 |
| |
(b) | the person who has the contract effecting the policy acquired the rights |
| |
under it on an assignment otherwise than for money or money’s worth. |
| |
(3) | This section does not withdraw the exemption from corporation tax afforded |
| |
by section 153, 156(3) or (5) or 158 in relation to profits arising from any part of |
| 30 |
a business relating to contracts made on or before 3 May 1966. |
| |
Exempt BLAGAB or eligible PHI business: benefits payable by friendly societies etc |
| |
160 | Maximum benefits payable to members |
| |
(1) | This section imposes restrictions on the entitlement of a person to have at any |
| |
time outstanding contracts with any one or more friendly societies, registered |
| 35 |
branches or insurance companies (“relevant persons”) which are— |
| |
(a) | for the assurance of gross sums under business which is afforded |
| |
exemption from corporation tax under section 153, 156(3) or (5) or 158 |
| |
(see subsections (2) and (3)), or |
| |
(b) | for the assurance by way of annuity under business which is afforded |
| 40 |
exemption from corporation tax under any of those provisions (see |
| |
| |
|
| |
|
| |
|
(2) | In the case of contracts for the assurance of gross sums made before 1 |
| |
September 1987, a person is not entitled to have outstanding at any time with |
| |
relevant persons contracts which, taking them all together, are for the |
| |
assurance of more than £750 (but see subsection (9)). |
| |
(3) | In the case of contracts for the assurance of gross sums at least one of which |
| 5 |
was made on or after that date, a person is not entitled to have outstanding at |
| |
any time with relevant persons— |
| |
(a) | contracts under which the total premiums payable in any period of 12 |
| |
| |
(b) | contracts made before 1 May 1995 under which the total premiums |
| 10 |
payable in any period of 12 months exceed £200, |
| |
(c) | contracts made before 25 July 1991 under which the total premiums |
| |
payable in any period of 12 months exceed £150, or |
| |
(d) | contracts made before 1 September 1990 under which the total |
| |
premiums payable in any period of 12 months exceed £100. |
| 15 |
(4) | In the case of contracts for the assurance by way of annuity, a person is not |
| |
entitled to have at any time outstanding with relevant persons contracts which, |
| |
taking them all together, are for the assurance of more than £156 (but see |
| |
| |
(5) | In applying the limits in this section in relation to the total premiums payable |
| 20 |
in any period of 12 months— |
| |
(a) | if the premiums are payable more frequently than annually, ignore an |
| |
amount equal to 10% of the premiums, and |
| |
(b) | ignore so much of any premium as is charged on the ground that an |
| |
exceptional risk of death or disability is involved. |
| 25 |
(6) | In applying the limits in this section, ignore — |
| |
(a) | any bonus or addition which is declared upon an assurance of a gross |
| |
sum or annuity or which accrues upon an assurance of a gross sum or |
| |
annuity by reference to an increase in the value of any investments, |
| |
(b) | any policy of insurance or annuity contract by means of which the |
| 30 |
benefits to be provided under an occupational pension scheme (within |
| |
the meaning of section 150(5) of FA 2004) are secured, |
| |
(c) | any annuity contract which constitutes, or is issued or held in |
| |
connection with, a registered pension scheme other than one within |
| |
| 35 |
(d) | any increase in a benefit under a friendly society contract (within the |
| |
meaning given by section 6 of the Decimal Currency Act 1969) resulting |
| |
from the adoption of a scheme prescribed or approved under |
| |
subsection (3) of that section. |
| |
(7) | In the case of a contract for the assurance of a gross sum made on or after 1 |
| 40 |
September 1987 but before 1 May 1995, there is a special rule if the amount |
| |
payable by way of premium under the contract is increased as a result of a |
| |
| |
(a) | in the period beginning with 25 July 1991 and ending with 31 July 1992, |
| |
| 45 |
(b) | in the period beginning with 1 May 1995 and ending with 31 March |
| |
| |
|
| |
|
| |
|
(8) | The rule is that, in relation to times when the contract has effect as varied, the |
| |
contract is to be treated for the purposes of this section as made at the time of |
| |
| |
(9) | If a person’s outstanding contracts with relevant persons were contracts which |
| |
were all made before 14 March 1984— |
| 5 |
(a) | subsection (2) has effect as if the reference to £750 were a reference to |
| |
| |
(b) | subsection (4) has effect as if the reference to £156 were a reference to |
| |
| |
161 | Section 160: supplementary |
| 10 |
(1) | This section makes further provision for the purposes of section 160 the |
| |
application of which depends on whether or not a friendly society is an old |
| |
| |
(2) | For the purposes of this Part an “old society” means— |
| |
(a) | a registered friendly society which was registered before 4 February |
| 15 |
| |
(b) | a registered friendly society which was registered in the period |
| |
beginning with that date and ending with 3 May 1966 and which on or |
| |
before 3 May 1966 carried on any life or endowment business (within |
| |
the meaning of section 29 of FA 1966), or |
| 20 |
(c) | an incorporated friendly society which, before its incorporation, was a |
| |
registered friendly society within paragraph (a) or (b). |
| |
(3) | In applying the limits in section 160(3) in relation to the total premiums |
| |
payable in any period of 12 months, ignore £10 of the premiums payable under |
| |
any contract made before 1 September 1987 by an old society. |
| 25 |
(4) | In applying the limits in section 160(3), the premiums under any contract for |
| |
an annuity which was made before 1 June 1984 by a friendly society other than |
| |
an old society are to be dealt with as if the contract were for the assurance of a |
| |
| |
(5) | In applying the limits in section 160 in any case where a person has outstanding |
| 30 |
with relevant persons one or more contracts made after 13 March 1984 and one |
| |
or more contracts made on or before that date, any contract for an annuity |
| |
which was made before 1 June 1984 by a friendly society other than an old |
| |
society is to be regarded— |
| |
(a) | as a contract for the annual amount concerned, and |
| 35 |
(b) | as a contract for the assurance of a gross sum equal to 75% 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 |
| |
| |
162 | Section 160: statutory declarations |
| 40 |
A friendly society, registered branch or insurance company may require a |
| |
person to make and sign a statutory declaration— |
| |
(a) | 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 |
| 45 |
limits set out in section 160, and |
| |
|
| |
|
| |
|
(b) | that the total premiums under those contracts do not exceed those |
| |
| |
Exempt BLAGAB or eligible PHI business: directions to old societies |
| |
163 | Directions given to old societies |
| |
(1) | HMRC Commissioners may give a direction under this section to an old |
| 5 |
| |
(2) | The Commissioners may give the direction if— |
| |
(a) | the society begins to carry on exempt BLAGAB or eligible PHI business |
| |
or, in their opinion, begins to carry on exempt BLAGAB or eligible PHI |
| |
business on an enlarged scale or of a new character, and |
| 10 |
(b) | it appears to them, having regard to the restrictions placed on |
| |
qualifying policies issued by friendly societies other than old societies |
| |
by paragraphs 3(1)(b) and 4(3)(b) of Schedule 15 to ICTA, that for the |
| |
protection of the revenue it is expedient to give the direction. |
| |
(3) | The direction is that (and has the effect that) the society is to be treated for the |
| 15 |
purposes of this Part and Schedule 15 to ICTA as a friendly society other than |
| |
an old society with respect to business carried on after the date of the direction. |
| |
(4) | The society may appeal against the direction on the ground that— |
| |
(a) | it has not begun to carry on business as mentioned in subsection (2)(a), |
| |
| 20 |
(b) | the direction is not necessary for the protection of the revenue. |
| |
(5) | The appeal must be made within 30 days of the date on which the direction is |
| |
| |
(6) | If a registered friendly society in respect of which a direction is in force under |
| |
this section becomes an incorporated friendly society, the direction continues |
| 25 |
to have effect, so that for the purposes of this Part and Schedule 15 to ICTA it |
| |
is treated as a friendly society other than an old society. |
| |
Exemption for other business |
| |
164 | Societies registered before 1 June 1973, etc |
| |
(1) | A registered friendly society which is a qualifying society is not liable to pay |
| 30 |
corporation tax (whether on income or chargeable gains) on its profits other |
| |
| |
(a) | life assurance business, or |
| |
(b) | PHI business comprised in BLAGAB or eligible PHI business. |
| |
(2) | A registered friendly society is a qualifying society if— |
| 35 |
(a) | it was registered before 1 June 1973 (but see section 168 for |
| |
circumstances in which it ceases to be a qualifying society), |
| |
(b) | it is registered on or after that date and its business is limited to the |
| |
provision, in accordance with its rules, of benefits for or in respect of |
| |
employees of a particular employer or such other group of persons as |
| 40 |
is for the time being approved for the purposes of this section by |
| |
| |
|
| |
|