|
| |
|
the opening and closing net values of any assets |
| |
directly referable to that category of business, |
| |
(b) | if there has been a relevant reattribution, the mean of |
| |
the opening and closing amounts of the shareholders’ |
| |
| 5 |
(c) | the mean of the appropriate parts (that is, the parts |
| |
relating to that category) of the opening and closing |
| |
amounts of the free assets amounts; |
| |
| |
(a) | the mean of the opening and closing liabilities of the |
| 10 |
gross roll-up business (but taking that mean to be nil |
| |
if it would otherwise be below nil), reduced (but not |
| |
below nil) by the mean of the opening and closing net |
| |
values of any assets directly referable to that category |
| |
| 15 |
(b) | the mean of the appropriate parts (that is, the parts |
| |
relating to that category) of the opening and closing |
| |
amounts of the free assets amounts; and |
| |
| |
(a) | the mean of the opening and closing liabilities of the |
| 20 |
PHI business (but taking that mean to be nil if it |
| |
would otherwise be below nil), reduced (but not |
| |
below nil) by the mean of the opening and closing net |
| |
values of any assets directly referable to that category |
| |
| 25 |
(b) | the mean of the appropriate parts (that is, the parts |
| |
relating to that category) of the opening and closing |
| |
amounts of the free assets amounts. |
| |
(6A) | For the purposes of subsection (5) above “the relevant fraction”, in |
| |
relation to gross roll-up business, is—![equation: over[char[B],plus[char[A],char[B],char[C]]]](missing.gif) |
| 30 |
| where A, B and C have the same meaning as in subsection (6) above. |
| |
(6B) | For the purposes of subsection (5) above “the relevant fraction”, in |
| |
relation to PHI business, is—![equation: over[char[C],plus[char[A],char[B],char[C]]]](missing.gif) |
| |
| where A, B and C have the same meaning as in subsection (6) above. |
| |
(6C) | But if the denominator found in accordance with subsection (6), (6A) |
| 35 |
or (6B) above is nil, the relevant fraction for the purposes of |
| |
subsection (5) above in relation to the category of business in |
| |
question is such fraction as is just and reasonable.” |
| |
| |
(a) | for “and (6A)” substitute “, (6A) and (6B)”, |
| 40 |
(b) | in paragraph (a), for “(4)” substitute “(4A)”, |
| |
(c) | in paragraph (b), after “(3)” insert “or (4A)”, and |
| |
(d) | in paragraph (c), omit “438B,”. |
| |
(10) | In subsection (8), for “subsections (6) and (6A)” substitute “subsection (6)”. |
| |
|
| |
|
| |
|
(11) | In subsection (8ZA), for “subsections (6) and (6A)” substitute “paragraph (c) |
| |
of the definition of A and paragraph (b) of the definitions of B and C in |
| |
| |
(12) | Omit subsection (9). |
| |
14 (1) | Section 432AA (Schedule A business or overseas property business) is |
| 5 |
| |
| |
(3) | In subsection (4), for paragraphs (a) to (d) substitute— |
| |
“(a) | basic life assurance and general annuity business; |
| |
(b) | gross roll-up business; and |
| 10 |
| |
(4) | In subsection (5), omit “(3) or”. |
| |
15 | In section 432AB (losses from Schedule A business or overseas property |
| |
business), omit subsection (6). |
| |
16 (1) | Section 432B (apportionment of receipts brought into account) is amended |
| 15 |
| |
| |
(a) | for “432F” substitute “432G”, and |
| |
(b) | for “any category of life assurance business” substitute “gross roll-up |
| |
| 20 |
(3) | In subsection (2), for “432F” substitute “432G”. |
| |
| |
(a) | for “Sections 432C and 432D apply” substitute “Section 432C |
| |
| |
(b) | insert at the end “(and section 432G applies in either case)”. |
| 25 |
| |
(a) | for “sections 432C and 432D” substitute “section 432C”, |
| |
(b) | in paragraph (a), for “apply” substitute “applies”, and |
| |
(c) | omit paragraph (b) and the word “and” before it. |
| |
| 30 |
(a) | for the words from “any category” to the end of paragraph (b) |
| |
substitute “gross roll-up business”, and |
| |
(b) | omit “the relevant fraction of”. |
| |
(7) | In subsection (6), for the words from “432D” to “annuity business” substitute |
| |
“432C to gross roll-up business”. |
| 35 |
(8) | In subsection (7), omit “the relevant fraction of” (in both places). |
| |
(9) | In subsection (8A), omit “the relevant fraction of”. |
| |
(10) | In subsection (8C), omit “the relevant fraction of”. |
| |
(11) | In subsection (9), omit the definitions of— |
| |
(a) | “the relevant fraction”, and |
| 40 |
(b) | “the section 83 net amount”. |
| |
|
| |
|
| |
|
| |
(a) | in paragraphs (a) and (b), for “paragraph (a)(ii)” substitute “the |
| |
definition of A, in paragraph (b)”, and |
| |
(b) | for paragraph (c) substitute— |
| |
“(c) | the substitution for the definitions of B and C of— |
| 5 |
“B is the amount that would be given by A if A |
| |
applied in relation to gross roll-up business; |
| |
| |
C is the amount that would be given by A if A |
| |
applied in relation to PHI business.”.” |
| 10 |
17 | For section 432C substitute— |
| |
“432C | Section 432B apportionment: non-participating funds |
| |
(1) | This section specifies the extent to which the net amount is referable |
| |
to life assurance business or to gross roll-up business. |
| |
(2) | In this section “the net amount” means the aggregate of the amounts |
| 15 |
| |
(a) | as investment income, |
| |
(b) | as an increase in the value of assets, or |
| |
| |
| less the aggregate of the amounts brought into account as a decrease |
| 20 |
| |
(3) | To the extent that the net amount is attributable to— |
| |
(a) | assets linked to life assurance business, or |
| |
(b) | foreign currency assets, |
| |
| it is referable to life assurance business. |
| 25 |
(4) | There is also referable to life assurance business the appropriate |
| |
fraction of so much of the net amount as is not attributable to linked |
| |
assets or foreign currency assets. |
| |
(5) | For the purposes of subsection (4) above “the appropriate fraction” |
| |
is—![equation: over[char[A],plus[char[A],char[B]]]](missing.gif) |
| 30 |
| |
A is the mean of the opening and closing liabilities of the |
| |
relevant business so far as referable to life assurance business |
| |
(but taking that mean to be nil if it would otherwise be below |
| |
nil), reduced (but not below nil) by the aggregate of the mean |
| 35 |
of the opening and closing net values of linked assets and |
| |
foreign currency assets; and |
| |
B is the mean of the opening and closing liabilities of the |
| |
relevant business so far as referable to PHI business, reduced |
| |
(but not below nil) by the mean of the opening and closing |
| 40 |
net values of any assets linked to PHI business. |
| |
(6) | But if the denominator found in accordance with subsection (5) |
| |
above is nil, the appropriate fraction for the purposes of subsection |
| |
(4) above is such fraction as is just and reasonable. |
| |
|
| |
|
| |
|
(7) | To the extent that the net amount is attributable to— |
| |
(a) | assets linked to gross roll-up business, or |
| |
(b) | foreign currency assets, |
| |
| it is referable to gross roll-up business. |
| |
(8) | There is also referable to gross roll-up business the relevant fraction |
| 5 |
of so much of the net amount as is not attributable to linked assets or |
| |
| |
(9) | For the purposes of subsection (8) above “the relevant fraction” is—![equation: over[char[C],plus[char[C],char[D]]]](missing.gif) |
| |
| |
C is the mean of the opening and closing liabilities of the |
| 10 |
relevant business so far as referable to gross roll-up business |
| |
(but taking that mean to be nil if it would otherwise be below |
| |
nil), reduced (but not below nil) by the aggregate of the mean |
| |
of the opening and closing net values of any assets linked to |
| |
gross roll-up business and foreign currency assets; and |
| 15 |
D is the mean of the opening and closing liabilities of the |
| |
relevant business so far as referable to basic life assurance |
| |
and general annuity business or PHI business (but taking that |
| |
mean to be nil if it would otherwise be below nil), reduced |
| |
(but not below nil) by the mean of the opening and closing |
| 20 |
net values of any assets linked to either of those categories of |
| |
| |
(10) | But if the denominator found in accordance with subsection (9) |
| |
above is nil, the relevant fraction for the purposes of subsection (8) |
| |
above is such fraction as is just and reasonable. |
| 25 |
(11) | For the purposes of this section, so much of the net amount— |
| |
(a) | as is brought into account as other income in an internal |
| |
linked fund of the company, and |
| |
(b) | as is not attributable to assets of that fund, |
| |
| is to be treated as linked to a category of business to the same extent |
| 30 |
as income attributable to an asset of the fund would, by virtue of |
| |
section 432ZA, be referable to that category of business.” |
| |
18 | Omit section 432D (section 432B apportionment: value of non-participating |
| |
| |
19 (1) | Section 432E (section 432B apportionment: participating funds) is amended |
| 35 |
| |
(2) | For subsection (1) substitute— |
| |
“(1) | The part of the net amount which is referable to life assurance |
| |
business or to gross roll-up business is— |
| |
(a) | the amount determined in accordance with subsections (2) |
| 40 |
| |
(b) | if greater, the amount determined in accordance with |
| |
| |
(1A) | In this section “the net amount” means the aggregate of the amounts |
| |
| 45 |
|
| |
|
| |
|
(a) | as investment income, |
| |
(b) | as an increase in the value of assets, or |
| |
| |
| less the aggregate of the amounts brought into account as a decrease |
| |
| 5 |
| |
(a) | in the definition of CAS, for “the category of business concerned” |
| |
substitute “life assurance business or of gross roll-up business”, and |
| |
(b) | in the definition of CS, for “business of the category concerned” |
| |
substitute “life assurance business or to gross roll-up business”. |
| 10 |
| |
(a) | in paragraph (a), after “that category of business” insert “and foreign |
| |
| |
| |
(i) | omit “mentioned in subsection (1) above”, and |
| 15 |
(ii) | insert at the end “and foreign currency assets”. |
| |
(5) | In subsection (4), for the words following “case,” substitute “is—![equation: cross[over[char[A],char[B]],num[100.0000000000000000,"100"]]](missing.gif) |
| |
| |
A is so much of the net amount as is brought into account in respect of |
| |
the relevant business less such part of it as is attributable to linked |
| 20 |
assets and foreign currency assets; and |
| |
B is the mean of the opening and closing liabilities of the relevant |
| |
business reduced by the mean of the opening and closing values of |
| |
any assets of the relevant business which are linked assets and |
| |
foreign currency assets.” |
| 25 |
(6) | In subsection (4A), after “linked assets” insert “or foreign currency assets”. |
| |
(7) | Omit subsections (5) and (6). |
| |
20 | In section 432F(2) (section 432B apportionment: supplementary |
| |
| |
(a) | omit “For each category of business in relation to which section 432E |
| 30 |
falls to be applied”, and |
| |
(b) | omit “, after making any reduction required by section 432E(5),”. |
| |
21 | For section 432G substitute— |
| |
“432G | Section 432B apportionment: business transfers-in |
| |
(1) | There is referable to the life assurance business of the transferee the |
| 35 |
appropriate fraction of the amount brought into account as a |
| |
business transfer-in and of any amount taken into account as profits |
| |
under subsection (1) of section 444ABD or as losses under subsection |
| |
| |
(2) | For the purposes of subsection (1) above “the appropriate fraction” |
| 40 |
is—![equation: over[times[char[L],char[A],char[B],char[L]],times[char[T],char[L]]]](missing.gif) |
| |
|
| |
|
| |
|
| |
LABL is the amount of the liabilities transferred that are |
| |
referable to the life assurance business (but is nil if it would |
| |
otherwise be below nil); and |
| |
TL is the whole of the liabilities transferred. |
| 5 |
(3) | But if the amount of the liabilities transferred is nil, the appropriate |
| |
fraction for the purposes of subsection (1) above is such fraction as is |
| |
| |
(4) | There is referable to the gross roll-up business of the transferee the |
| |
relevant fraction of the amount brought into account as a business |
| 10 |
transfer-in and of any amount taken into account as profits under |
| |
subsection (1) of section 444ABD or as losses under subsection (2) of |
| |
| |
(5) | For the purposes of subsection (4) above “the relevant fraction” is—![equation: over[times[char[G],char[R],char[B],char[L]],times[char[T],char[L]]]](missing.gif) |
| |
| 15 |
GRBL is the amount of the liabilities transferred that are |
| |
referable to the gross roll-up business (but is nil if it would |
| |
otherwise be below nil); and |
| |
TL has the same meaning as in subsection (2) above. |
| |
(6) | But if the amount of the liabilities transferred is nil, the relevant |
| 20 |
fraction for the purposes of subsection (4) above is such fraction as is |
| |
| |
22 (1) | Section 434 (franked investment income etc) is amended as follows. |
| |
(2) | For subsections (1) and (1B) substitute— |
| |
“(1) | Where an insurance company makes a payment representative of a |
| 25 |
distribution made by a company resident in the United Kingdom in |
| |
respect of an asset of its long-term insurance fund, the payment is to |
| |
be taken into account in computing its profits in accordance with the |
| |
provisions applicable to Case I of Schedule D unless the amount |
| |
taken into account in accordance with section 83(2)(a) of the Finance |
| 30 |
Act 1989 includes the amount of the payment.” |
| |
(3) | Omit subsection (6A)(b). |
| |
23 (1) | Section 434A (computation of losses and limitation on relief) is amended as |
| |
| |
(2) | In subsection (2)(a)— |
| 35 |
(a) | omit “the aggregate of”, and |
| |
(b) | omit sub-paragraph (iii). |
| |
(3) | In subsection (2)(b), for the words following sub-paragraph (ii) substitute— |
| |
| “any loss for that period under section 436A shall be reduced |
| |
(but not below nil) by the total of the amounts set off as |
| 40 |
mentioned in sub-paragraphs (i) and (ii) above.” |
| |
24 | Omit section 436 (pension business: separate charge on profits). |
| |
|
| |
|
| |
|
25 | Before section 437 insert— |
| |
“436A | Gross roll-up business: separate charge on profits |
| |
(1) | Profits arising to an insurance company from gross roll-up |
| |
| |
(a) | are to be treated as income within Schedule D, and |
| 5 |
(b) | are chargeable under Case VI of that Schedule. |
| |
| |
(a) | the gross roll-up business is to be treated separately, and |
| |
(b) | the profits from it are to be computed in accordance with the |
| |
provisions of this Act applicable to Case I of Schedule D. |
| 10 |
(3) | In making that computation, sections 82 and 82B to 83AB of the |
| |
Finance Act 1989 apply with the necessary modifications. |
| |
(4) | If in any accounting period an insurance company incurs a loss, to be |
| |
computed on the same basis as the profits, arising from its gross roll- |
| |
| 15 |
(a) | the loss must be set off against the amount of any profits |
| |
chargeable under this section for any subsequent accounting |
| |
| |
(b) | accordingly, the amount of the company’s profits so charged |
| |
in any such accounting period is to be treated as reduced by |
| 20 |
the amount of the loss or so much of that amount as cannot |
| |
be relieved under this section against profits of an earlier |
| |
| |
(5) | Section 396 does not apply to a loss incurred by an insurance |
| |
company on its gross roll-up business. |
| 25 |
(6) | No loss to which section 396 applies may be set off under subsection |
| |
(4) above against the amount of any profits chargeable under this |
| |
| |
(7) | This section does not apply in relation to an insurance company for |
| |
an accounting period if the profits of its long-term business for the |
| 30 |
accounting period are charged to tax under Case I of Schedule D. |
| |
436B | Gains referable to gross roll-up business not to be chargeable gains |
| |
(1) | Gains referable to gross roll-up business are not chargeable gains. |
| |
(2) | For the purposes of this section “gains referable to gross roll-up |
| |
business” means gains which— |
| 35 |
(a) | accrue to an insurance company on the disposal by it of assets |
| |
of its long-term insurance fund, and |
| |
(b) | are referable (in accordance with section 432A) to gross roll- |
| |
| |
26 (1) | Section 438 (pension business: exemption from tax) is amended as follows. |
| 40 |
(2) | In subsection (1), for the words after “income” substitute “from assets solely |
| |
linked to pension business.” |
| |
(3) | Omit subsections (2) and (4). |
| |
27 | Omit section 438B (income or gains arising from property investment LLP). |
| |
|
| |
|