SCHEDULE 16 continued PART 3 continued
“(3) No allowance in respect of an investment asset is to be taken into account in calculating for corporation tax purposes the profits of any non-BLAGAB long-term business carried on by the company.”
105 (1) Section 560 (transfer of insurance company business) is amended as follows.
(2) In subsection (1)(b)(ii), omit the words from “within” to the end.
(3) In subsection (5), after paragraph (d) insert—
“(e) qualifying overseas transfer” means so much of a transfer of the whole or any part of the business of an overseas life insurance company carried on through a permanent establishment in the United Kingdom as takes place in accordance with an authorisation granted outside the United Kingdom for the purposes of Article 14 of the Council Directive of 5 November 2002 concerning life assurance (2002/83/EC).”
106 (1) Schedule A1 (first-year tax credits) is amended as follows.
(2) In paragraph 7—
(a) in sub-paragraph (2), for the words from “which is treated” to the end substitute “which, as a result of section 87(3) of FA 2012, is treated for the purposes of section 76 of that Act as a deemed BLAGAB management expense for an accounting period”, and
(b) in sub-paragraph (3), for “section 432AA” substitute “section 86” and for “section 432AB(4)” substitute “section 87(4)”.
(3) In paragraph 9—
(a) in sub-paragraph (1), for “life assurance business” substitute “basic life assurance and general annuity business” and for “under the I minus E basis” substitute “in accordance with the I - E rules”, and
(b) in sub-paragraph (2), for “section 76(12) of ICTA” substitute “section 73 of FA 2012”.
(4) In paragraph 14—
(a) in sub-paragraph (2), for “section 76(12) of ICTA” substitute “section 73 of FA 2012”,
(b) in sub-paragraph (3), for “section 76(12)” substitute “section 73”,
(c) in sub-paragraph (5), for “section 76(12) of ICTA” substitute “section 73 of FA 2012”, and
(d) for sub-paragraph (6) substitute—
“(6) Disregard any amounts brought forward from an earlier chargeable period which fall to be taken into account in calculating for the purposes of section 73 of FA 2012 the amount of adjusted BLAGAB management expenses of the company for the period in question as a result of—
(a) the previous application of section 73 or 93 of FA 2012, or
(b) the carry forward to the period in question of an amount under section 391(3) of CTA 2009 (loan relationship deficit carried forward).”
(5) In paragraph 16—
(a) in sub-paragraph (1), for “life assurance business” substitute “basic life assurance and general annuity business” and for “under the I minus E basis” substitute “in accordance with the I - E rules”, and
(b) for sub-paragraph (3) substitute—
“(3) For this purpose, no account is to be taken of any amounts brought forward from an earlier chargeable period which fall to be taken into account in calculating for the purposes of section 73 of FA 2012 the amount of adjusted BLAGAB management expenses of the company for the period in question as a result of—
(a) the previous application of section 73 or 93 of FA 2012, or
(b) the carry forward to the period in question of an amount under section 391(3) of CTA 2009 (loan relationship deficit carried forward).”
(6) In paragraph 21—
(a) in sub-paragraph (1)(a), for the words from “treated” to the end substitute “which, as a result of section 87(3) of FA 2012, is treated for the purposes of section 76 of that Act as a deemed BLAGAB management expense for the chargeable period”,
(b) in sub-paragraph (1)(b), for “section 76(12) of that Act” substitute “section 73 of FA 2012”, and
(c) in sub-paragraph (2), for “section 76(12) of ICTA” substitute “section 73 of FA 2012”.
(7) In paragraph 22—
(a) in sub-paragraph (1), for “life assurance business” substitute “basic life assurance and general annuity business” and for “under the I minus E basis” substitute “in accordance with the I - E rules”, and
(b) for sub-paragraph (2) substitute—
“(2) For the purposes of those rules, the total amount which may—
(a) be carried forward under section 73 of FA 2012 from a chargeable period in which the company claims a first-year tax credit, and
(b) be brought into account for the next chargeable period in accordance with step 5 in section 76 of FA 2012,
is treated as reduced by the amount of the loss surrendered.”
107 (1) Part 2 of Schedule 1 (index of defined expressions) is amended as follows.
(2) Omit the entry for “life assurance business”.
(3) Insert the following entries at the appropriate places—
| “insurance company | section 65 of FA 2012 (as applied by section 141(2) of that Act)” |
| “long-term business | section 63(1) of FA 2012 (as applied by section 141(2) of that Act)” |
| “non-BLAGAB long-term business | sections 66 and 67 of FA 2012 (as applied by section 141(2) of that Act)” |
108 FA 2003 is amended as follows.
109 Omit section 156 (overseas life insurance companies).
110 ITEPA 2003 is amended as follows.
111 In section 357(3) (business entertainment and gifts: exception where employer’s expenses disallowed), for paragraph (b) substitute—
“(b) the ordinary BLAGAB management expenses of the employer for the purposes of section 76 of FA 2012.”
112 FA 2004 is amended as follows.
113 In section 196(4) (relief for employers in respect of contributions paid)—
(a) in the opening words, for “section 76 of ICTA” substitute “section 76of FA 2012”, and
(b) in paragraph (a), for “brought into account at Step 1 in subsection (7) of that section to the extent that they otherwise would not be” substitute “treated as meeting the conditions in section 77(2)(a) and (c) of that Act to the extent that they would otherwise not meet them”.
114 In section 196A(4)(c) (power to restrict relief), for “brought into account at Step 1 in section 76(7) of ICTA (expenses of insurance companies) in respect of the employer” substitute “ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012”.
115 In section 196L(2) (employer asset-backed contributions: supplementary), as inserted by Part 3 of Schedule 13 to this Act, for paragraph (c) substitute—
“(c) the contribution being ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012.”
116 In section 197(10)(b) (spreading of relief), for “section 76 of ICTA” substitute “section 76 of FA 2012”.
117 In section 199 (deemed contributions), for subsection (5) substitute—
“(5) And, for the purposes of section 76 of FA 2012, it is to be treated as meeting the conditions in section 77(2)(a) and (c) of that Act to the extent that it would otherwise not meet them.”
118 In section 199A(10)(c) (indirect contributions), for “brought into account at Step 1 in section 76(7) of ICTA (expenses of insurance companies) in respect of E” substitute “ordinary BLAGAB management expenses of E for an accounting period for the purposes of section 76 of FA 2012”.
119 In section 200 (no other relief for employers in connection with contributions), for paragraph (c) substitute—
“(c) are to count as ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012,”.
120 (1) Section 246 (restriction of deduction for non-contributory provision) is amended as follows.
(2) In subsection (2), for paragraph (c) substitute—
“(c) are not to count as ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012.”
(3) In subsection (3)(b), for “section 76 of ICTA” substitute “section 76 of FA 2012”.
121 In section 246A(4)(c) (case where no relief for provision by an employer), for “brought into account at Step 1 in section 76(7) of ICTA (expenses of
insurance companies) in respect of the employer” substitute “ordinary BLAGAB management expenses of the employer for an accounting period for the purposes of section 76 of FA 2012”.
122 In section 280(1) (abbreviations)—
(a) omit the “and” before the definition of “CTA 2009”, and
(b) after that definition insert—
““FA 2012” means the Finance Act 2012.”
123 F(No.2)A 2005 is amended as follows.
124 In section 18(3)(b) (specific powers relating to authorised unit trusts and open-ended investment companies), for sub-paragraph (iii) (but not the “or” at the end of it) substitute—
“(iii) by an insurance company (within the meaning of section 65 of FA 2012) as assets for the purposes of its long-term business (within the meaning of section 63of that Act),”.
125 ITTOIA 2005 is amended as follows.
126 In section 48(4A) (car hire)—
(a) at the end of paragraph (a) insert “or”,
(b) in paragraph (b), after “management),” insert “including as applied by section 82(4) of FA 2012.”, and
(c) omit paragraph (c) (together with the “or” before that paragraph).
127 In section 473(2) (policies and contracts to which Chapter 9 of Part 4 applies: general), in the definition of “capital redemption policy”, for “within the meaning of Chapter 1 of Part 12 of ICTA” substitute “within the meaning given by section 56(3) of FA 2012”.
128 In section 476(3) (special rules: foreign policies), in the definition of “overseas life assurance business”, for “same meaning as in Part 12 of ICTA (see section 431D of that Act)” substitute “meaning given by section 61 of FA 2012”.
129 In section 504(7) (part surrenders: payments under guaranteed income bonds etc), in the definition of “pension business”, for “section 431B of ICTA” substitute “section 58 of FA 2012”.
130 (1) Section 531 (gains from contracts for life insurance etc: cases where income tax not treated as paid) is amended as follows.
(2) In subsection (3), after paragraph (b) insert—
“(ba) a contract the effecting or carrying out of which constitutes protection business within the meaning of section 62 of FA 2012,
(bb) a contract which is not within paragraph (ba) but which, as a result of subsection (4) of that section, is treated for the purposes of that section as being made at any time,”.
(3) In subsection (4), in the definition of “basic life assurance and general annuity business”, for “Chapter 1 of Part 12 of ICTA (see section 431F)” substitute “Part
2
of FA 2012 (see sections 57 and 67(5))”.
131 In paragraph 118(2) of Schedule 2 (pre-1 January 2005 contracts for immediate needs annuities: income tax treated as paid), for the words from “means” to the end substitute “means the application of section 57(2)(d) of FA 2012”.
132 ITA 2007 is amended as follows.
133 In section 564B(1) (meaning of “financial institution”)—
(a) in paragraph (g), for “section 431(2) of ICTA” substitute “section 65of FA 2012”, and
(b) in paragraph (h), for “section 431(2) of ICTA” substitute “section 139(1) of FA 2012”.
134 In section 681DP (relevant tax relief), for paragraph (c) substitute—
“(c) a deduction of an amount which for the purposes of section 73 of FA 2012 is adjusted BLAGAB management expenses of an insurance company for an accounting period,”.
135 CTA 2009 is amended as follows.
136 In section A1(2) (overview of the Corporation Tax Acts)—
(a) omit paragraph (a), and
(b) omit the “and” before paragraph (j) and after that paragraph insert—
“(k) Part
2
of FA 2012 (insurance companies carrying on long-term business),”.
137 (1) Section 18Q (UK resident insurance companies: profits of foreign permanent establishments) is amended as follows.
(2) In subsection (1), omit “(as defined in section 431(2) of ICTA)”.
(3) Omit subsections (2) and (3).
138 For section 24 substitute—
(1) This section makes provision in a case where the non-UK resident company mentioned in subsection (1) of section 21 is an insurance company.
(2) In accordance with the principle in that subsection, the permanent establishment is treated as holding—
(a) the same or a similar quantity of assets, and
(b) assets of the same or similar description,
as would have been held by a distinct and separate enterprise acting as mentioned in paragraphs (a) and (b) of that subsection.
(3) The assets which the permanent establishment is treated as holding in accordance with the principle in that subsection may include a proportion of assets held by the company.
(4) Nothing in subsection (2) or (3) is to be read as preventing the application of similar principles to those provided for by that subsection in a case where the non-UK resident company mentioned in section 21(1) is not an insurance company.
(5) The Commissioners for Her Majesty’s Revenue and Customs may by regulations make other provision about the application of section 21(1) in a case where the non-UK resident company mentioned there is an insurance company.
(6) The regulations may, in particular, make provision in place of section 21(2)(b) as to the basis on which, in the case of an insurance company, capital is to be attributed to a permanent establishment in the United Kingdom.”
139 In section 36(3) (farming and market gardening), for “of the company’s long-term insurance fund” substitute “held by the company for the purposes of its long-term business”.
140 In section 38(3)(d) (commercial occupation of land other than woodlands), for “of the company’s long-term insurance fund” substitute “held by the company for the purposes of its long-term business”.
141 In section 39(5)(a) (profits of mines, quarries and other concerns), for “of the company’s long-term insurance fund” substitute “held by the company for the purposes of its long-term business”.
142 In section 46(3)(a) (generally accepted accounting practice), omit sub-paragraph (ii) (together with the “or” before it).
143 In section 56(5) (car hire)—
(a) at the end of paragraph (a), insert “including as applied by section 82(4) of FA 2012, or”, and
(b) omit paragraph (c) (together with the “or” before that paragraph).
144 In section 130(1)(a) (insurers receiving distributions etc), for “life assurance business” substitute “business in relation to which section 111 of FA 2012 applies”.
145 In section 201 (priority rules: provisions which must be given priority over Part 3 of Act), after subsection (1) insert—
“(1A) Subsection (1) does not apply in the case of the long-term business of an insurance company.”
146 In section 203(4) (property businesses)—
(a) for “section 432AA of ICTA” substitute “section 86 of FA 2012”, and
(b) for “in the case of” substitute “for the purpose of applying the I - E rules in relation to”.
147 (1) Section 298 (meaning of trade and purposes of trade) is amended as follows.
(2) In subsection (3)—
(a) at the end of paragraph (a), insert “or”, and
(b) omit paragraph (c) (together with the “or” before it).
(3) After subsection (5) insert—
“(6) In the case of activities carried on by a company in the course of any basic life assurance and general annuity business, provision corresponding to that made by subsection (3) is made by section 88of FA 2012 for the purpose of applying the I - E rules.”
148 (1) Section 336 (transfers of loans on group transactions) is amended as follows.
(2) In subsection (4), for “is within one of the categories set out in section 440(4)(a), (d) and (e) of ICTA (assets held for certain categories of long-term business)” substitute “is held for the purposes of a company’s long-term business”.
(3) After that subsection insert—
“(4A) For the purposes of subsection (4)—
(a) in the case of an overseas life insurance company, ignore transfers in relation to assets which are not UK assets (within the meaning of section 117 of FA 2012), and
(b) section 122 of that Act applies as it applies for the purposes of Chapter
8
of Part
2
of that Act.”
149 (1) Section 337 (transfers of loans on insurance business transfers) is amended as follows.
(2) After subsection (3) insert—
“(3A) In subsection (3)(b) “qualifying overseas transfer” means so much of a transfer of the whole or any part of the business of an overseas life insurance company carried on through a permanent establishment in the United Kingdom as takes place in accordance with an authorisation granted outside the United Kingdom for the purposes of Article 14 of the Council Directive of 5 November 2002 concerning life assurance (2002/83/EC).”
(3) In subsection (4)(a), for “the categories set out in section 440(4) of ICTA” substitute “the applicable categories”.
(4) After subsection (4) insert—
“(4A) For the purposes of subsection (4)(a) “the applicable categories” means—
(a) in the case of a UK life insurance company, the long-term business categories or a category of assets which are not held for the purposes of its long-term business, and
(b) in the case of an overseas life insurance company, the UK long-term business categories, a category of UK assets which are not held for the purposes of its long-term business or a category of assets which are held by it but which are not UK assets.
(4B) For the purposes of subsection (4A)—
(a) “the long-term business categories” has the same meaning as in section 116 of FA 2012,
(b) “the UK long-term business categories” and “UK assets” have the same meanings as in section 117 of that Act, and
(c) section 122 of that Act applies as it applies for the purposes of Chapter
8
of Part
2
of that Act.”
150 (1) Section 386 (overview of Chapter 10 of Part 5 (insurance companies)) is amended as follows.
(2) In subsection (2)—
(a) in paragraph (a), after “apply” insert “for the purposes of the I - E rules” and at the end insert “and”, and
(b) omit paragraph (c) (together with the “and” before it).
(3) In subsection (3)—
(a) in paragraph (a), omit “or of BLAGAB”,
(b) in paragraph (a), after “trade)” insert “and section 88 of FA 2012 (equivalent rule for activities carried on in the course of BLAGAB)”, and
(c) in paragraph (f), for “as expenses of insurance companies at Step 1 of section 76(7) of ICTA” substitute “as ordinary BLAGAB management expenses”.
151 In section 387(1) (treatment of deficit on BLAGAB: introduction), after “apply” insert “for the purposes of the I - E rules”.
152 In section 388(3) (basic rule: deficit set off against income and gains of deficit period), for “before any expenses deduction under section 76 of ICTA (expenses of insurance companies)” substitute “in accordance with step 4 in section 73 of FA 2012 (that is to say, before any deduction for the adjusted BLAGAB management expenses of the company for the deficit period)”.
153 In section 389 (claim to carry back deficit), after subsection (2) insert—
“(2A) If any of the claim amount is carried back in accordance with this section to an accounting period, the amount which is so carried back is to be left out of account for the purpose of applying section 93 of FA 2012 in the case of that period.”
154 (1) Section 390 (meaning of “available profits”) is amended as follows.
(2) In subsection (4), for the words from “which is” to the end substitute “of the BLAGAB credits in respect of the company’s loan relationships that count as income for the purposes of the I - E rules for that period (as determined by section 88(3) and (4))”.
(3) In subsection (5)—
(a) in step 1(a), for “so much of the expenses deduction for the period given by Step 8 in section 76(7) of ICTA (expenses of insurance companies) as is referable to BLAGAB” substitute “the amount for the purposes of section 73 of FA 2012 of the adjusted BLAGAB management expenses of the company for the period”,
(b) in step 1(b), for “so referable” substitute “referable to BLAGAB”,
(c) in step 2(a), for the words from “so referable” to “ICTA” substitute “which could be applied in determining for the purposes of section 73 of FA 2012 the amount of the adjusted BLAGAB management expenses of the company for the period”, and
(d) in step 2(b), for “so referable” substitute “referable to BLAGAB”.
(4) For subsection (6) substitute—
“(6) In the case of any claim under section 389, references in subsection (5) to the amount for the purposes of section 73 of FA 2012 of the adjusted BLAGAB management expenses of the company for the period are references to that amount as determined on the assumptions in subsections (7) and (8).”
155 In section 391 (carry forward of surplus deficit to next accounting period), for subsection (3) substitute—
“(3) Any deficit so carried forward is treated for the purposes of section 76 of FA 2012 as a deemed BLAGAB management expense for the next period.”
156 Omit sections 393 and 394 (insurance companies: determination of questions requiring apportionments) and the italic heading before those sections.
157 In section 399 (index-linked gilt-edged securities), at the end insert—
“(6) In the case of insurance companies, the application of sections 400 to 400C is subject to section 112 of FA 2012.”
158 In section 464(3) (list of exceptions to general rule that Part 5 (loan relationships) has priority for corporation tax purposes), omit paragraph (h) (but not the “and” at the end of that paragraph).
159 In section 471(3) (connections between persons: creditors who are insurance companies carrying on BLAGAB), for “is linked for that period to that business” substitute “is matched for that period to a BLAGAB liability”.
160 In section 472(4)(b) (meaning of “control”), for “of an insurance company’s long-term insurance fund” substitute “held by an insurance company for the purposes of its long-term business”.
161 In section 473(3)(b) (meaning of “major interest”), for “of an insurance company’s long-term insurance fund” substitute “held by an insurance company for the purposes of its long-term business”.
162 In section 486(4) (exclusion of exchange gains and losses in respect of tax debts etc), for paragraph (c) substitute—
“(c) as ordinary BLAGAB management expenses within the meaning of section 77 of FA 2012 (insurance companies carrying on basic life assurance and general annuity business).”
163 In section 502(1) (meaning of “financial institution”)—
(a) in paragraph (g), for “section 431(2) of ICTA” substitute “section 65of FA 2012”, and
(b) in paragraph (h), for “section 431(2) of ICTA” substitute “section 139(1) of FA 2012”.
164 In section 560(4) (investment life insurance contracts: introduction)—
(a) in paragraph (a), for “section 431(2) of ICTA” substitute “section 65of FA 2012” and for “that section” substitute “section 63 of that Act”, and
(b) in paragraph (b), for the words from “but” to the end substitute “if subsection (3)(a) were omitted from section 65 of that Act.”
165 In section 561(2) (meaning of “investment life insurance contract”), in the definition of “capital redemption policy”, for “section 431(2ZF) of ICTA” substitute “section 56(3) of FA 2012”.
166 In section 563(6)(a) (increased non-trading credits for BLAGAB and EEA taxed contracts), for “section 88(1) of FA 1989” substitute “section 102(3) of FA 2012”.
167 (1) Section 591 (conditions A to E mentioned in section 589(5)) is amended as follows.
(2) In subsection (2)(a), for “life assurance business” substitute “long-term business”.
(3) In subsection (2)(b), after “Sourcebook” insert “(within the meaning given by section 139(4) of FA 2012)”.
168 (1) Section 634 (insurance companies) is amended as follows.
(2) The existing text becomes subsection (1) of that section.
(3) In that subsection, omit paragraph (b) (together with the “or” before it).
(4) After that subsection insert—
“(2) In the case of activities carried on by a company in the course of any basic life assurance and general annuity business, provision corresponding to that made by subsection (1) is made by section 88of FA 2012 for the purpose of applying the I - E rules.”
169 (1) Section 635 (creditor relationships of insurance companies: embedded derivatives which are options) is amended as follows.
(2) In subsection (1)(a), for “life assurance business” substitute “basic life assurance and general annuity business”.
(3) In subsection (2), for “This Part” substitute “For the purpose of applying the I - E rules, this Part”.
170 (1) Section 636 (insurance companies: modifications of Chapter 5 (continuity of treatment on transfers within groups)) is amended as follows.
(2) In subsection (3), after the subsection (2B) which is treated as if it were inserted in section 626 insert—
“(2C) In subsection (2B) “qualifying overseas transfer” means so much of a transfer of the whole or any part of the business of an overseas life insurance company carried on through a permanent establishment in the United Kingdom as takes place in accordance with an authorisation granted outside the United Kingdom for the purposes of Article 14 of the Council Directive of 5 November 2002 concerning life assurance (No. 2002/83/EC).”
(3) In subsection (4), for the words from “the asset was within one of the categories set out in section 440(4)(a), (d) and (e) of ICTA” to the end substitute “, immediately before or after the transfer, the asset was held for the purposes of a company’s long-term business (but, in the case of an overseas life insurance company, ignoring assets which are not UK assets (within the meaning of section 117 of FA 2012)).”
(4) In subsection (5)(a), for “the categories set out in section 440(4) of ICTA (transfers of assets etc)” substitute “the applicable categories”.
(5) After subsection (5) insert—
“(5A) For the purposes of subsection (5)(a) “the applicable categories” means—
(a) in the case of a UK life insurance company, the long-term business categories or a category of assets which are not held for the purposes of its long-term business, and
(b) in the case of an overseas life insurance company, the UK long-term business categories, a category of UK assets which are not held for the purposes of its long-term business or a category of assets which are held by it but which are not UK assets.”
(6) After subsection (7) insert—
“(8) For the purposes of this section—
(a) “the long-term business categories” has the same meaning as in section 116 of FA 2012, and “the UK long-term business categories” and “UK assets” have the same meanings as in section 117 of FA 2012, and
(b) section 122 of FA 2012 applies as it applies for the purposes of Chapter
8
of Part
2
of that Act.”
171 In section 699(3) (list of exceptions to general rule that Part 7 (derivative contracts) has priority for corporation tax purposes)—
(a) at the end of paragraph (a) insert “and”, and
(b) omit paragraph (c) (together with the “and” before it).
172 In section 710 (derivative contracts: other definitions)—
(a) in the definition of “capital redemption policy”, for “section 431(2ZF) of ICTA” substitute “section 56(3) of FA 2012”,
(b) in the definition of “contract of insurance”, for “section 431(2) of ICTA” substitute “section 64 of FA 2012”, and
(c) in the definition of “contract of long-term insurance”, for “section 431(2) of ICTA” substitute “section 64 of FA 2012”.
173 In section 746(2)(c) (“non-trading credits” and “non-trading debits”), for “section 901(3)” substitute “section 901”.
174 In section 800(3) (excluded assets: introduction), omit paragraph (b) (together with the “and” before it).
175 In section 806(3) (assets excluded from Part 8 (intangible fixed assets): financial assets), after paragraph (c) (but before the “and” at the end of that paragraph) insert—
“(ca) assets so far as they are derived from, or are referable to, contracts or policies of insurance or capital redemption policies,”.
176 In section 810 (mutual trade or business), omit subsection (2).
177 In section 815 (election to exclude capital expenditure on software), omit subsection (8).
178 In section 855(4) (further provision about regulations under section 854), omit “or section 902”.
179 For section 901 substitute—
In the application of the I - E rules in relation to a company’s basic life assurance and general annuity business, the provisions of this Part need to be read with section 88 of FA 2012 (which provides for the activities carried on by the company in the course of that business not to constitute the whole or any part of a trade or of a property business).”
180 Omit sections 902 (excluded assets) and 903 (elections to exclude capital expenditure on computer software) and the italic heading before those sections.
181 Omit section 904 (transfers of life assurance business: transfers of assets treated as tax-neutral).
182 In section 906(3) (list of exceptions to general rule that Part 8 has priority for corporation tax purposes), omit paragraph (b) (but not the “and” at the end of that paragraph).
183 In section 931S(3) (company distributions: meaning of “small company”), in the definition of “insurance company”, for “section 431 of ICTA” substitute “section 65 of FA 2012”.
184 In section 931W (provisions which must be given priority over Part 9A), omit subsection (3).
185 In section 985 (references to a deduction being allowed to a company), for subsection (4) substitute—
“(4) If—
(a) the company is a company in relation to which the I - E rules apply, and
(b) the expenses are referable, in accordance with Chapter
4
of Part
2
of FA 2012, to the company’s basic life assurance and general annuity business,
the expenses are treated for the purposes of section 76 of that Act as ordinary BLAGAB management expenses of the company.”
186 In section 999 (deduction for costs of setting up SAYE option scheme or CSOP scheme), for subsection (5) substitute—
“(5) If—
(a) the company is a company in relation to which the I - E rules apply, and
(b) the expenses are referable, in accordance with Chapter
4
of Part
2
of FA 2012, to the company’s basic life assurance and general annuity business,
the expenses are treated for the purposes of section 76 of that Act as ordinary BLAGAB management expenses of the company.”
187 (1) Section 1000 (deduction for costs of setting up employee share ownership trust) is amended as follows.
(2) In subsection (2), for “subsections (3) and (4)” substitute “subsection (3)”.
(3) Omit subsection (4).
188 In section 1013 (relief if shares acquired by employee or other person: how relief is given), for subsection (4) substitute—
“(4) If—
(a) the employing company is a company in relation to which the I - E rules apply, and
(b) the relief is referable, in accordance with Chapter
4
of Part
2
of FA 2012, to the employing company’s basic life assurance and general annuity business,
the amount of relief is treated for the purposes of section 76 of that Act as ordinary BLAGAB management expenses of the company referable to the accounting period.”
189 In section 1021 (relief if employee or other person obtains option to acquire shares: how relief is given), for subsection (4) substitute—
“(4) If—
(a) the employing company is a company in relation to which the I - E rules apply, and
(b) the relief is referable, in accordance with Chapter
4
of Part
2
of FA 2012, to the employing company’s basic life assurance and general annuity business,
the amount of relief is treated for the purposes of section 76 of that Act as ordinary BLAGAB management expenses of the company referable to the accounting period.”
190 (1) Section 1080 (entitlement to relief: I minus E basis) is amended as follows.
(2) In subsection (1), for “under the I minus E basis in respect of its life assurance business” substitute “in respect of its basic life assurance and general annuity business in accordance with the I - E rules”.
(3) For subsection (2) substitute—
“(2) If any additional deduction to which the company would otherwise be entitled under section 1074 is referable, in accordance with Chapter
4
of Part
2
of FA 2012, to the company’s basic life assurance and general annuity business, it is to be treated for the purposes of section 76 of that Act as a deemed BLAGAB management expense for the accounting period in question.”
(4) Omit subsections (3) and (4).
191 In section 1083 (refunds of expenditure treated as income chargeable to tax), omit subsections (4) and (5).
192 In section 1143(4) (overview of Part 14)—
(a) in paragraph (a), for “life assurance business” substitute “basic life assurance and general annuity business”, and
(b) in paragraph (b), for ““life assurance company tax credits”” substitute ““BLAGAB tax credits””.
193 (1) Section 1153 (land remediation tax credit: amount of a loss which is “unrelieved”) is amended as follows.
(2) In subsection (3), for the words from “, as a result of section 432AB(3) of ICTA,” to the end substitute “, as a result of section 87(3) of FA 2012, the loss is treated for the purposes of section 76 of that Act as a deemed BLAGAB management expense for the relevant accounting period.”
(3) In subsections (4) to (6), for “section 76(12) of ICTA” substitute “section 73 of FA 2012”.
(4) In subsection (7), for paragraph (b) substitute—
“(b) taken into account in calculating for the purposes of section 73 of FA 2012 the amount of adjusted BLAGAB management expenses of the company for the relevant accounting period as a result of—
(i) the previous application of section 73 or 93 of FA 2012, or
(ii) the carry forward to the relevant accounting period of an amount under section 391 of this Act (surplus deficit).”
(5) In subsection (8)—
(a) in paragraph (b), for “section 432AA of ICTA” substitute “section 86of FA 2012”, and
(b) in the words after that paragraph, for “section 432AB(4) of ICTA” substitute “section 87(4) of FA 2012”.
194 (1) Section 1158 (restriction on losses carried forward where tax credit claimed) is amended as follows.
(2) In subsection (3)—
(a) for paragraph (a) substitute—
“(a) as a result of section 87(3) of FA 2012, a company’s UK property business loss is treated for the purposes of section 76 of that Act as a deemed BLAGAB management expense for the accounting period,” and
(b) in paragraph (b), for “section 76(12) of ICTA” substitute “section 73of FA 2012”.
(3) In subsection (4), for “section 76(12) of ICTA” substitute “section 73 of FA 2012”.
195 In the heading for Chapter 4 of Part 14, for “LIFE ASSURANCE BUSINESS” substitute “BLAGAB”.
196 Omit section 1159 (limitation on relief under Chapter 2 of Part 14: insurance companies) and the italic heading before that section.
197 In section 1160 (provision in respect of I minus E basis)—
(a) for “The remaining provisions of this Chapter apply” substitute “This Chapter applies”, and
(b) for “under the I minus E basis in respect of its life assurance business” substitute “in respect of its basic life assurance and general annuity business in accordance with the I - E rules”.
198 (1) Section 1161 (relief in respect of I minus E basis: expenses payable) is amended as follows.
(2) In subsection (6), for “section 76(7) of ICTA” substitute “section 76 of FA 2012”.
(3) In subsection (7)(a), for “life assurance business” substitute “basic life assurance and general annuity business”.
199 (1) Section 1162 (additional relief) is amended as follows.
(2) In subsection (3), for the words from “as expenses payable” to the end substitute “for the purposes of section 76 of FA 2012 as deemed BLAGAB management expenses for the accounting period”.
(3) In subsection (4)(b), for the words from “which” to the end substitute “of the expenditure which, for the purposes of section 76 of FA 2012, is not an ordinary BLAGAB management expense of the company referable to the accounting period as a result of the application of section 77(2)(b) of that Act”.
200 In the italic heading before section 1164, for “Life assurance” substitute “BLAGAB”.
201 (1) Section 1164 (entitlement to tax credit) is amended as follows.
(2) In subsections (1) and (2)—
(a) for “a life assurance company tax credit” substitute “a BLAGAB tax credit”, and
(b) for “qualifying life assurance business loss” substitute “qualifying BLAGAB loss”.
(3) In subsections (3) and (4), for “a life assurance company tax credit” substitute “a BLAGAB tax credit”.
202 (1) Section 1165 (meaning of “qualifying life assurance business loss”) is amended as follows.
(2) In subsection (1)—
(a) in the opening words, for ““qualifying life assurance business loss”” substitute ““qualifying BLAGAB loss””, and