|
| |
|
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 |
| 5 |
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- |
| |
| |
(5) | In this section “post-policy holder surplus” means an amount equal |
| |
to—![equation: plus[times[char[S],char[A]],minus[times[char[T],char[A],char[P]]]]](missing.gif) |
| 10 |
| |
| |
(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; |
| 15 |
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; |
| |
| 20 |
| and for this purpose “SA” and “TAP” have the same meaning as in |
| |
| |
(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 |
| 25 |
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 |
| |
| |
444AK | Mutual surplus: Case VI categories of life assurance business |
| |
(1) | This section applies if at any time in a period of account of an |
| 30 |
insurance company (“the relevant period”)— |
| |
(a) | the company carries on life assurance business as mutual |
| |
| |
(b) | the company carries on one or more categories of life |
| |
assurance business chargeable to tax under Case VI of |
| 35 |
| |
(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 |
| 40 |
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 |
| 45 |
computing in accordance with the provisions of this Act applicable |
| |
|
| |
|
| |
|
to Case I of Schedule D the profits for the relevant period of any |
| |
category of the company’s life assurance business chargeable to tax |
| |
under Case VI of Schedule D. |
| |
(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 |
| 5 |
| |
(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 |
| 10 |
| |
(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, |
| 15 |
| 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 |
| 20 |
(b) | is one in relation to which sections 432C and 432D apply, |
| |
| that subsection shall have effect as if paragraph (b) and the word “or” |
| |
| |
(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— |
| 25 |
(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 |
| 30 |
| |
| |
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 |
| 35 |
the end of the period of account immediately preceding the |
| |
| |
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 |
| 40 |
January 2003 and to end on or after 9th April 2003. |
| |
444AL | Interpretation of sections 444AF to 444AK |
| |
(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 |
| 45 |
| |
|
| |
|
| |
|
(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 |
| |
| |
(4) | References to the unappropriated surplus of the transferor at the end |
| 5 |
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.”. |
| 10 |
(2) | The amendment made by this paragraph has effect in relation to periods of |
| |
account ending on or after 29th September 2005. |
| |
(3) | In determining for the purposes of section 444AF of ICTA the undistributed |
| |
demutualisation surplus of an insurance company for the first period of |
| |
account of the company to end on or after 29th September 2005 and before |
| 15 |
22nd March 2006 (“the transitional period”), the value of UDSP in subsection |
| |
(7) of that section is to be taken to be— |
| |
(a) | the amount given by sub-paragraph (4), or |
| |
(b) | if less, the amount given by sub-paragraph (5). |
| |
(4) | The amount given by this sub-paragraph is the total amount of any |
| 20 |
demutualisation transfer surpluses accruing to the company— |
| |
(a) | on or after 1st January 1990, and |
| |
(b) | before the beginning of the transitional period. |
| |
(5) | The amount given by this sub-paragraph is the lowest amount of |
| |
unappropriated surplus of the company at the end of any period of account |
| 25 |
| |
(a) | on or after the date of the last occasion on which a demutualisation |
| |
transfer surplus accrued to it as mentioned in sub-paragraph (4), and |
| |
(b) | before the beginning of the transitional period. |
| |
(6) | Sections 444AF(3), 444AG, 444AH and 444AL of ICTA apply for the |
| 30 |
purposes of sub-paragraphs (3) to (5), but section 444AG has effect subject to |
| |
the following modifications— |
| |
(a) | in subsection (5)(a), omit— |
| |
(i) | the words “the aggregate of”, |
| |
(ii) | sub-paragraph (ii), and |
| 35 |
(iii) | the word “and” before that sub-paragraph; |
| |
(b) | in subsection (5)(b), for “that aggregate amount” substitute “that |
| |
| |
(c) | omit subsection (10). |
| |
(7) | In determining the value of DTSI for the purposes of section 444AF(7) of |
| 40 |
ICTA where the relevant period ends on or after 29th September 2005 and |
| |
before 22nd March 2006, section 444AG of ICTA has effect subject to the |
| |
modifications specified in sub-paragraph (6). |
| |
(8) | Where the relevant period ends on or after 29th September 2005 and before |
| |
22nd March 2006, section 444AI of ICTA has effect as if subsections (6) and |
| 45 |
(7) of that section were omitted. |
| |
(9) | Sub-paragraphs (10) to (12) apply in relation to an insurance company if— |
| |
|
| |
|
| |
|
(a) | a period of account of the company did not end on or after 29th |
| |
September 2005 and before 22nd March 2006; |
| |
(b) | any value of UDSP given by sub-paragraph (3) in relation to the |
| |
company is lower than it would have been if the words from “but” in |
| |
sub-paragraph (6) to the end of that sub-paragraph had been |
| 5 |
| |
(c) | any value of DTSI in section 444AF(7) of ICTA for any period of |
| |
account of the company ending on or after 29th September 2005 and |
| |
before 22nd March 2006 is, by virtue of sub-paragraph (7), lower than |
| |
it would have been if that sub-paragraph had been omitted. |
| 10 |
(10) | In determining for the purposes of section 444AF of ICTA the undistributed |
| |
demutualisation surplus of an insurance company for the first period of |
| |
account of the company to end on or after 22nd March 2006 (“the initial |
| |
period”), the value of UDSP in subsection (7) of that section is to be taken to |
| |
| 15 |
(a) | the amount given by sub-paragraph (11), or |
| |
(b) | if less, the amount given by sub-paragraph (12). |
| |
(11) | The amount given by this sub-paragraph is the total amount of any |
| |
demutualisation transfer surpluses accruing to the company— |
| |
(a) | on or after 1st January 1990, and |
| 20 |
(b) | before the beginning of the initial period. |
| |
(12) | The amount given by this sub-paragraph is the lowest amount of |
| |
unappropriated surplus of the company at the end of any period of account |
| |
| |
(a) | on or after the date of the last occasion on which a demutualisation |
| 25 |
transfer surplus accrued to it as mentioned in sub-paragraph (11), |
| |
| |
(b) | before the beginning of the initial period. |
| |
(13) | Sections 444AF(3), 444AG, 444AH and 444AL of ICTA apply for the |
| |
purposes of sub-paragraphs (10) to (12). |
| 30 |
(14) | In relation to any period of account ending before 31st December 2005, the |
| |
references in section 444AJ(5) and (8) of ICTA to line 34 of Form 58 are to be |
| |
taken to be references to line 35 of Form 58. |
| |
Receipts to be taken into account |
| |
6 (1) | Section 83 of FA 1989 is amended as follows. |
| 35 |
(2) | In subsection (2B) (circumstances in which fair value of assets of long-term |
| |
insurance fund which are transferred are to be brought into account)— |
| |
(a) | for “unless the assets” substitute “except to the extent that the assets |
| |
| |
(b) | in paragraph (a) for “or (2D)” substitute “, (2D) or (2DA)”. |
| 40 |
(3) | After subsection (2D) (exclusion if assets transferred for fair value and |
| |
consideration forms part of long-term insurance fund) insert— |
| |
| |
(a) | assets of the company’s long-term insurance fund are |
| |
transferred by the company to another person (“the |
| 45 |
| |
|
| |
|
| |
|
(b) | the transferee assumes, as a result of the transfer, a liability |
| |
representing a debenture loan which, immediately before |
| |
the transfer, was a liability of that fund, and |
| |
(c) | the liability does not, as a result of the transfer, become a |
| |
liability of any long-term insurance fund of the transferee, |
| 5 |
| so much of the fair value of the assets as does not exceed the fair |
| |
value of the liability is excluded from subsection (2B) above.”. |
| |
(4) | In subsection (8) (definitions), in the definition of “fair value”, for “, in |
| |
relation to assets,” to “its amount;” substitute “— |
| |
(a) | in relation to assets, means the amount which would |
| 10 |
be obtained from an independent person purchasing |
| |
them or, if the assets are money, its amount; |
| |
(b) | in relation to liabilities, means the amount which |
| |
would be paid to an independent person assuming |
| |
| 15 |
(5) | The amendments made by this paragraph have effect in relation to transfers |
| |
taking place on or after 22nd March 2006. |
| |
Changes in value of assets brought into account: non-profit companies |
| |
7 (1) | After section 83 of FA 1989 insert— |
| |
“83YA | Changes in value of assets brought into account: non-profit |
| 20 |
| |
(1) | This section applies if, in the case of any non-profit company,— |
| |
(a) | the amount shown in line 51 of Form 14 of its periodical |
| |
return in respect of the whole of its long-term business for |
| |
any period of account (“the current period of account”), |
| 25 |
| |
(b) | the aggregate amount of the amounts shown in line 51 of |
| |
Form 14 of its periodical return in respect of its with-profits |
| |
funds (if any) for that period. |
| |
(2) | A comparison shall be made between— |
| 30 |
(a) | the appropriate line 51 amount of the company for the |
| |
current period of account (“the current line 51 amount”), and |
| |
(b) | the aggregate amount of the appropriate line 51 amount of |
| |
the company for the previous period of account (if any) and |
| |
the amount of any transfer-in amount of the company for that |
| 35 |
| |
(3) | If the current line 51 amount is greater than that aggregate amount, |
| |
an amount equal to the difference shall be deemed for the purposes |
| |
of section 83(2) to be brought into account for the current period of |
| |
account as an increase in the value of non-linked assets. |
| 40 |
(4) | If the current line 51 amount is less than that aggregate amount, an |
| |
amount equal to the difference shall be deemed for the purposes of |
| |
section 83(2) to be brought into account for the current period of |
| |
account as a decrease in the value of non-linked assets. |
| |
|
| |
|
| |
|
(5) | The amount brought into account by virtue of this section shall be |
| |
deemed for the purposes of section 83(2) to be brought into |
| |
| |
(a) | in the revenue account mentioned in section 83A(2)(a), or |
| |
(b) | if section 83A(4) is applicable, in the separate revenue |
| 5 |
account treated as prepared by virtue of that provision. |
| |
(6) | Any amount brought into account by virtue of this section is in |
| |
addition to any amount brought into account for the purposes of |
| |
section 83(2) for the current period of account as an increase or |
| |
decrease in the value of non-linked assets apart from this section. |
| 10 |
(7) | For the purposes of this section a company has a transfer-in amount |
| |
for any period of account (“the previous period of account”) if— |
| |
(a) | a transfer takes place in the following period of account, and |
| |
(b) | the company, as the transferee, is a party to an election under |
| |
section 444AD of the Taxes Act 1988 (transfers of business: |
| 15 |
modification of section 83(2B)), |
| |
| and the amount of the transfer-in amount for the previous period of |
| |
account is the amount specified in subsection (4) of that section. |
| |
(8) | For the purposes of this section and section 83YB “non-profit |
| |
company”, in relation to a period of account, means a company |
| 20 |
carrying on long-term business where, at the end of that period,— |
| |
(a) | none of the liabilities of that business, or |
| |
(b) | none but an insignificant proportion of those liabilities, |
| |
| are with-profits liabilities. |
| |
(9) | But if a company considers that, in relation to a period of account, it |
| 25 |
is no longer such a company, it may elect to be treated for the |
| |
purposes of this section and section 83YB as if, in relation to that |
| |
period of account and every subsequent period of account, it were a |
| |
| |
| 30 |
| |
(b) | must be made by notice to an officer of the Board on or before |
| |
the end of the period of 6 months beginning with the day on |
| |
which that period of account ends. |
| |
(11) | For the purposes of this section and section 83YB— |
| 35 |
“amount”, in relation to line 51 of Form 14 of the company’s |
| |
periodical return, includes a nil amount; |
| |
“with-profits fund” has the same meaning as in the Integrated |
| |
| |
83YB | Meaning of “appropriate line 51 amount” for purposes of s.83YA |
| 40 |
(1) | For the purposes of section 83YA, the appropriate line 51 amount of |
| |
a non-profit company for any period of account is determined as |
| |
| |
| |
| Find the company’s basic line 51 amount for the period of account. |
| 45 |
| |
|
| |
|
| |
|
| Reduce that amount (but not below nil) by the amount of any |
| |
unrecognised capital amount of the company for the period of |
| |
| |
| But this step applies only if the period of account for which the |
| |
appropriate line 51 amount of the company is being determined is |
| 5 |
the current period of account for the purposes of section 83YA. |
| |
| |
| Increase the resulting amount by the amount of any relevant loan |
| |
repayment made by the company in the period of account. |
| |
(2) | For the purposes of step 1, the company’s basic line 51 amount for |
| 10 |
any period of account is— |
| |
(a) | in the case where no with-profits funds form part of its long- |
| |
term business for that period, the amount shown in line 51 of |
| |
Form 14 of its periodical return in respect of the whole of its |
| |
long-term business for that period, and |
| 15 |
(b) | in any other case, so much of that amount as exceeds the |
| |
aggregate amount of the amounts shown in line 51 of Form |
| |
14 of its periodical return in respect of its with-profits funds |
| |
| |
(3) | For the purposes of step 2, the company has an unrecognised capital |
| 20 |
amount for any period of account if— |
| |
(a) | any assets (“the added assets”) become assets of its long-term |
| |
insurance fund but do not become assets of any of its with- |
| |
| |
(b) | the consideration for the acquisition of the added assets does |
| 25 |
not comprise any assets which, immediately before the |
| |
acquisition, were assets of its long-term insurance fund, |
| |
(c) | no amount is shown in respect of the added assets in any of |
| |
lines 17 to 41 of Form 14 of its periodical return in respect of |
| |
the whole of its long-term business for the period of account, |
| 30 |
| |
(d) | no amount is brought into account for the period of account |
| |
in consequence of the acquisition of the added assets. |
| |
(4) | For the purposes of step 2, the amount of the unrecognised capital |
| |
amount for the period of account is the amount equal to the fair value |
| 35 |
| |
(5) | For this purpose the “fair value of the added assets” means— |
| |
(a) | the amount which would be obtained from an independent |
| |
person purchasing them, or |
| |
(b) | if the assets are money, its amount. |
| 40 |
(6) | For the purposes of step 3, a relevant loan repayment is made by the |
| |
company in any period of account if— |
| |
(a) | a repayment in respect of a loan is made by the company in |
| |
the period of account, and |
| |
(b) | the loan is one in relation to which the company has, for the |
| 45 |
purposes of step 2, an unrecognised capital amount for that |
| |
or any other period of account.”. |
| |
(2) | The amendment made by this paragraph has effect in relation to periods of |
| |
account ending on or after 29th September 2005. |
| |
|
| |
|