|
| |
|
Meaning of “brought into account” |
| |
13 (1) | Section 83A of FA 1989 is amended as follows. |
| |
(2) | In subsection (2) (accounts which are recognised for the purposes of sections |
| |
| |
(a) | in paragraph (b) (separate revenue account prepared under Chapter |
| 5 |
9 of the Prudential Sourcebook (Insurers) in respect of a part of the |
| |
company’s long-term business to be a recognised account) for “part |
| |
of that business” substitute “with-profits fund (see subsection (6))”; |
| |
(b) | omit the words from “Paragraph (b) above” to the end of the |
| |
| 10 |
(3) | After subsection (3) insert— |
| |
“(3A) | Where, in the case of any with-profits fund in respect of which there |
| |
is prepared such a separate account (“the sub-fund”),— |
| |
(a) | the sub-fund forms part of another with-profits fund (“the |
| |
wider fund”) in respect of which such a separate account is |
| 15 |
| |
(b) | in the case of a company whose life assurance business is |
| |
mutual business, the sub-fund and each other with-profits |
| |
fund which forms part of the wider fund are 100:0 funds, and |
| |
| 20 |
(i) | does not form part of another with-profits fund in |
| |
respect of which such a separate account is also |
| |
| |
(ii) | forms part of another with-profits fund in respect of |
| |
which such a separate account is also prepared and |
| 25 |
that separate account is treated by this subsection as |
| |
not being a recognised account for the purposes of |
| |
| |
| the account in respect of the wider fund shall not be a recognised |
| |
account for the purposes of those sections. |
| 30 |
(3B) | Where, in the case of such a separate account prepared in respect of |
| |
| |
(a) | the account is not prevented from being a recognised account |
| |
for the purposes of those sections by virtue of subsection (3A) |
| |
| 35 |
(b) | if paragraph (b) of that subsection were to be omitted, the |
| |
account would be prevented from being such a recognised |
| |
account by virtue of that subsection, |
| |
| no such separate account prepared in respect of a with-profits fund |
| |
forming part of that fund shall be such a recognised account. |
| 40 |
(3C) | In subsection (3A) above “100:0 fund” means a fund in the case of |
| |
| |
(a) | the policy holders of the fund are entitled to participate in all |
| |
the profits of the fund, and |
| |
(b) | no other persons are entitled to participate in any of the |
| 45 |
| |
|
| |
|
| |
|
(3D) | Subsection (3E) below applies where there is prepared such a |
| |
separate account (“the with-profits account”) in respect of a with- |
| |
| |
(a) | of which no other with-profits fund forms part, but |
| |
(b) | of which a non-profit fund (see subsection (6)) forms part. |
| 5 |
(3E) | Where this subsection applies— |
| |
(a) | the with-profits account shall not be a recognised account for |
| |
the purposes of those sections, but |
| |
(b) | there shall be treated as having been required and prepared |
| |
a further separate revenue account covering so much of the |
| 10 |
items brought into account in the with-profits account as |
| |
remains after excluding the items brought into account in |
| |
that account in respect of the non-profit fund.”. |
| |
(4) | For subsection (4) substitute— |
| |
| 15 |
(a) | a company prepares a revenue account in respect of the |
| |
whole of its long-term business (“the main account”), |
| |
(b) | it prepares one or more such separate accounts as are |
| |
mentioned in subsection (2)(b) above, and |
| |
(c) | the total of the items brought into account in the separate |
| 20 |
| |
(i) | excluding any such accounts which by virtue of |
| |
subsection (3A), (3B) or (3E)(a) above are not |
| |
recognised accounts for the purposes of those |
| |
| 25 |
(ii) | including any such accounts which by virtue of |
| |
subsection (3E)(b) above are treated as having been |
| |
| |
| is not equal to the total amount brought into account in the |
| |
| 30 |
| there shall be treated as having been required and prepared a further |
| |
separate revenue account covering the balance.”. |
| |
(5) | At the end of the section insert— |
| |
“(6) | In this section “with-profits fund” and “non-profit fund” have the |
| |
same meaning as in the Integrated Prudential Sourcebook.”. |
| 35 |
(6) | The amendments made by this paragraph have effect in relation to periods |
| |
of account beginning on or after 1st January 2005. |
| |
Changes in recognised accounts: attribution of amounts carried forward under s.432F of ICTA |
| |
14 (1) | After section 83A of FA 1989 insert— |
| |
“83B | Changes in recognised accounts: attribution of amounts carried |
| 40 |
forward under s.432F of Taxes Act 1988 |
| |
(1) | This section applies to a company where any revenue account that is |
| |
recognised for a period of account (the “new period of account”) |
| |
relates to funds or business which is different from the funds or |
| |
business to which a revenue account that was recognised for the |
| 45 |
preceding period of account relates. |
| |
|
| |
|
| |
|
(2) | Any subsection (2) excess (within the meaning of section 432F(2) of |
| |
the Taxes Act 1988) which would have been available under section |
| |
432F(3) or (4) of that Act to reduce a subsection (3) figure (within the |
| |
meaning of section 432F(1) of that Act) of the company in the new |
| |
period of account shall be attributed between the revenue accounts |
| 5 |
that are recognised for that period of account in such manner as is |
| |
| |
(3) | In this section “recognised” means recognised, by virtue of section |
| |
83A, for the purposes of sections 82A to 83AB.”. |
| |
(2) | The amendment made by this paragraph has effect in relation to new |
| 10 |
periods of account (within the meaning given by section 83B(1) of FA 1989) |
| |
beginning on or after 1st January 2005. |
| |
Charge of certain receipts of basic life assurance business |
| |
15 (1) | Section 85 of FA 1989 is amended as follows. |
| |
(2) | In subsection (2) (receipts excluded from charge under Case VI of Schedule |
| 15 |
D in respect of receipts referable to company’s basic life assurance and |
| |
general annuity business) after paragraph (e) insert “; or |
| |
(f) | any payment received under the Financial Services |
| |
Compensation Scheme to enable the company to meet its |
| |
obligations to policy holders.”. |
| 20 |
(3) | In subsection (2C) (rules as to whether receipt is referable to company’s basic |
| |
life assurance and general annuity business for the purposes of subsection |
| |
(1)) after paragraph (a) insert— |
| |
“(aa) | in the case of a repayment or refund of expenses other than |
| |
acquisition expenses, the expenses— |
| 25 |
(i) | were attributable to basic life assurance and general |
| |
annuity business for the purposes of Step 1 in |
| |
subsection (7) of the new section 76 (see subsection (8) |
| |
| |
(ii) | fell to be deducted by virtue of subsection (1) of the |
| 30 |
| |
| and for this purpose, “the new section 76” and “the old |
| |
section 76” have the same meaning as in section 44 of the |
| |
Finance Act 2004 (see subsection (8) of that section),”. |
| |
(4) | The amendments made by this paragraph have effect in relation to |
| 35 |
accounting periods ending on or after 16th March 2005. |
| |
Corporation tax: policy holders’ fraction of profits |
| |
16 (1) | Section 88 of FA 1989 is amended as follows. |
| |
(2) | In subsection (3A) (meaning of “income and gains of the company’s life |
| |
assurance business” in subsection (3)) after paragraph (a) insert— |
| 40 |
“(aa) | receipts of the company chargeable under Case VI of |
| |
Schedule D by virtue of section 85(1) above, |
| |
(ab) | income of the company treated as referable to basic life |
| |
assurance and general annuity business by section 441B(2) of |
| |
the Taxes Act 1988 (treatment of UK land), |
| 45 |
|
| |
|
| |
|
(ac) | amounts treated as accruing to the company and charged to |
| |
tax under Case VI of Schedule D by virtue of section 442A of |
| |
that Act (taxation of investment return where risk reinsured), |
| |
| |
(3) | The amendment made by this paragraph has effect in relation to periods of |
| 5 |
account beginning on or after 1st January 2005. |
| |
Overseas life insurance companies |
| |
17 (1) | Section 156 of FA 2003 is amended as follows. |
| |
(2) | For subsection (4) (regulations amending certain provisions relating to |
| |
overseas life insurance companies may be made with effect from 1st January |
| 10 |
| |
“(4) | Regulations under this section may be made so as to have effect in |
| |
relation to accounting periods or periods of account (whenever |
| |
beginning) which end on or after the day on which the regulations |
| |
| 15 |
Meaning of “pension business” |
| |
18 (1) | Schedule 35 to FA 2004 is amended as follows. |
| |
(2) | Paragraph 20 (life assurance: meaning of “pension business”) is amended as |
| |
| |
(3) | In the section 431B of ICTA substituted by that paragraph, in subsection |
| 20 |
| |
(a) | after “registered pension scheme” (where first occurring) insert “by |
| |
virtue of the withdrawal of registration of the pension scheme under |
| |
section 157 of the Finance Act 2004”; |
| |
(b) | after “in which the pension scheme” insert “so”. |
| 25 |
(4) | In that section, insert at the end— |
| |
| |
(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 |
| 30 |
| |
(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 |
| 35 |
been entered into for such purposes.”. |
| |
(5) | Paragraph 22 (friendly societies: meaning of “pension business”) is amended |
| |
| |
(6) | In sub-paragraph (3), in the subsection (2B) of section 466 of ICTA inserted |
| |
| 40 |
(a) | after “registered pension scheme” (where first occurring) insert “by |
| |
virtue of the withdrawal of registration of the pension scheme under |
| |
section 157 of the Finance Act 2004”; |
| |
(b) | after “in which the pension scheme” insert “so”. |
| |
|
| |
|
| |
|
(7) | The preceding provisions of this paragraph come into force on 6th April |
| |
| |
Miscellaneous references to “class” of business |
| |
19 (1) | In section 432B of ICTA (apportionment of receipts brought into account) in |
| |
subsection (1), for “class” substitute “category”. |
| 5 |
(2) | In section 444A of ICTA (transfers of business) in subsection (3), for “class” |
| |
| |
(3) | In Schedule 12 to FA 1997 (leasing arrangements: finance leases and loans) |
| |
in paragraph 19 (companies carrying on life assurance business) in sub- |
| |
paragraph (2), for “class” substitute “category”. |
| 10 |
(4) | In Schedule 29 to FA 2002 (gains and losses of a company from intangible |
| |
fixed assets) in paragraph 138 (interpretation provisions relating to |
| |
insurance companies) in sub-paragraph (3), for “class” substitute “category”. |
| |
(5) | The amendments made by this paragraph have effect in relation to periods |
| |
of account beginning on or after 1st January 2005. |
| 15 |
Transfers of business: references to accounting period ending with day of transfer |
| |
20 (1) | Section 12 of ICTA (corporation tax: basis of, and periods for, assessment) is |
| |
| |
(2) | In subsection (7A), after “(7ZA) above” insert “and subject to subsection (7C) |
| |
| 20 |
(3) | After subsection (7B) insert— |
| |
“(7C) | Where subsection (1) of section 444AA applies in the case of an |
| |
insurance business transfer scheme— |
| |
(a) | an accounting period of the transferor shall end for purposes |
| |
| 25 |
(i) | with the end of the period covered by the periodical |
| |
return deemed by virtue of subsection (2) of that |
| |
| |
(ii) | where the last period covered by an actual periodical |
| |
return of the transferor ends immediately before the |
| 30 |
transfer, with the end of that period, |
| |
| (so that an accounting period will end immediately before the |
| |
| |
(b) | an accounting period of the transferor shall end for purposes |
| |
of corporation tax with the end of the period covered by the |
| 35 |
periodical return deemed by virtue of subsection (3) of that |
| |
section (so that the time of the transfer shall be an accounting |
| |
period of the transferor); |
| |
| and for this purpose, expressions used in this subsection and in that |
| |
section have the same meaning in this subsection as in that section.”. |
| 40 |
(4) | In section 444AB of ICTA (transfers of business: charge on transferor |
| |
retaining assets) in subsection (3), for “ending with the day of the transfer” |
| |
substitute “ending immediately before the transfer”. |
| |
|
| |
|
| |
|
(5) | In section 444ABA of ICTA (subsequent charge in certain cases within |
| |
section 444AB of ICTA) in subsection (3), for “ending with the day of the |
| |
transfer” substitute “ending immediately before the transfer”. |
| |
(6) | In section 213 of TCGA 1992 (spreading of gains and losses under section 212 |
| |
of TCGA 1992) at the end insert— |
| 5 |
“(10) | If the transfer is one to which section 444AA(1) of the Taxes Act |
| |
applies, the references in this section to the accounting period of the |
| |
transferor ending with the day of the transfer are references to the |
| |
accounting period ending immediately before the transfer.”. |
| |
(7) | The amendments made by sub-paragraphs (2) to (5) have effect in relation to |
| 10 |
insurance business transfer schemes taking place on or after 16th March |
| |
| |
(8) | The amendment made by sub-paragraph (6) has effect where the accounting |
| |
period for which the net amount represents an excess of losses over gains is |
| |
an accounting period beginning on or after 1st January 2003. |
| 15 |
| |
| |
Stamp duty land tax: miscellaneous amendments |
| |
| |
Amendments coming into force in accordance with paragraph 16 |
| |
| 20 |
1 | Part 4 of FA 2003 (stamp duty land tax) is amended in accordance with this |
| |
| |
Transfer of rights: exclusion of transaction to which alternative finance provisions apply |
| |
2 | In section 45 (contract and conveyance: effect of transfer of rights) at the end |
| |
of subsection (3) insert “except in a case where the secondary contract gives |
| 25 |
rise to a transaction that is exempt from charge by virtue of subsection (3) of |
| |
section 73 (alternative property finance: land sold to financial institution and |
| |
| |
| |
3 | In paragraph 1 of Schedule 7 (group relief), in sub-paragraph (7) for |
| 30 |
“paragraph 3” substitute “paragraphs 3 and 4A”. |
| |
4 | In paragraph 3 of Schedule 7 (withdrawal of group relief)— |
| |
(a) | for sub-paragraph (2) substitute— |
| |
“(2) | The amount chargeable is the tax that would have been |
| |
chargeable in respect of the relevant transaction but for |
| 35 |
group relief if the chargeable consideration for that |
| |
transaction had been an amount equal to— |
| |
(a) | the market value of the subject-matter of the |
| |
| |
|
| |
|
| |
|
(b) | if the acquisition was the grant of a lease at a rent, |
| |
| |
| or, as the case may be, an appropriate proportion of the tax |
| |
that would have been so chargeable.”, and |
| |
(b) | at the end of sub-paragraph (5) insert “and paragraph 4A |
| 5 |
(withdrawal of group relief in certain cases involving successive |
| |
| |
5 | In paragraph 4 of Schedule 7 (cases in which group relief is not |
| |
| |
(a) | in sub-paragraph (3), for paragraph (b) substitute— |
| 10 |
“(b) | another company that— |
| |
(i) | is above the vendor in the group structure, |
| |
| |
(ii) | as a result of the transaction ceases to be a |
| |
member of the same group as the |
| 15 |
| |
(b) | in sub-paragraph (5), for “this purpose” substitute “the purposes of |
| |
sub-paragraphs (3) and (4)”. |
| |
6 | After paragraph 4 of Schedule 7 insert— |
| |
“Withdrawal of group relief in certain cases involving successive transactions |
| 20 |
4A (1) | Where, in the case of a transaction (“the relevant transaction”) that |
| |
is exempt from charge by virtue of paragraph 1 (group relief)— |
| |
(a) | there is a change in the control of the purchaser, |
| |
| |
(i) | before the end of the period of three years |
| 25 |
beginning with the effective date of the relevant |
| |
| |
(ii) | in pursuance of, or in connection with, |
| |
arrangements made before the end of that period, |
| |
(c) | apart from this paragraph, group relief in relation to the |
| 30 |
relevant transaction would not be withdrawn under |
| |
| |
(d) | any previous transaction falls within sub-paragraph (2), |
| |
| paragraphs 3 and 4 have effect in relation to the relevant |
| |
transaction as if the vendor in relation to the earliest previous |
| 35 |
transaction falling within sub-paragraph (2) were the vendor in |
| |
relation to the relevant transaction. |
| |
(2) | A previous transaction falls within this sub-paragraph if— |
| |
(a) | the previous transaction is exempt from charge by virtue of |
| |
| 40 |
(b) | the effective date of the previous transaction is less than |
| |
three years before the date of the event falling within sub- |
| |
| |
(c) | the chargeable interest acquired under the relevant |
| |
transaction by the purchaser in relation to that transaction |
| 45 |
is the same as, comprises, forms part of, or is derived from, |
| |
the chargeable interest acquired under the previous |
| |
|
| |
|