|
| |
|
(2) | In subsection (2), insert at the appropriate places— |
| |
““child trust fund business” has the meaning given by section |
| |
| |
““foreign currency assets”, in relation to an insurance company |
| |
and any time during a period of account, means assets, other |
| 5 |
than assets linked to gross roll-up business, which— |
| |
(a) | are at that time managed under the control of a |
| |
person whose normal place of work is at a permanent |
| |
establishment outside the United Kingdom at or |
| |
through which the company carries on gross roll-up |
| 10 |
| |
(b) | are denominated in a foreign currency and specified |
| |
in a certificate given by a director of the company no |
| |
later than three months after the end of the period of |
| |
account as being all of the assets of the company’s |
| 15 |
long-term insurance fund which are held at that time |
| |
during the period of account to enable the company |
| |
to meet liabilities of its gross roll-up business which |
| |
are denominated in that currency;”, |
| |
““gross roll-up business” has the meaning given by section |
| 20 |
| |
““immediate needs annuities business” means business which |
| |
consists of the effecting or carrying out of immediate needs |
| |
annuities (within the meaning of section 725 of ITTOIA |
| |
| 25 |
““individual savings account business” has the meaning given |
| |
| |
““PHI business” means long-term business other than life |
| |
assurance business (including the reinsurance of such long- |
| |
| 30 |
(3) | In subsection (2), omit the definitions of— |
| |
(a) | “annuity business”, and |
| |
(b) | “overseas life assurance fund”. |
| |
(4) | In subsection (2), for the definition of “life assurance business” substitute— |
| |
““life assurance business” means business which— |
| 35 |
(a) | consists of the effecting or carrying out of contracts of |
| |
insurance which fall within paragraph I, II, III or |
| |
VII(b) of Schedule 1 to the Financial Services and |
| |
Markets Act 2000 (Regulated Activities) Order 2001, |
| |
| 40 |
(b) | is capital redemption business, |
| |
other than immediate needs annuities business;”. |
| |
(5) | In subsection (2), for the definition of “reinsurance business” substitute— |
| |
““reinsurance” includes retrocession;”. |
| |
(6) | After subsection (2ZE) insert— |
| 45 |
“(2ZF) | In this Chapter “capital redemption business” means any business of |
| |
a company carrying on insurance business in so far as it consists of |
| |
the effecting on the basis of actuarial calculations, and the carrying |
| |
out, of contracts under which, in return for one or more fixed |
| |
|
| |
|
| |
|
payments, a sum or series of sums of a specified amount become |
| |
payable at a future time or over a period.” |
| |
7 | In section 431A(3)(a) (power to amend), omit “and Schedule 19AA”. |
| |
8 | After section 431B insert— |
| |
“431BA | Meaning of “child trust fund business” |
| 5 |
(1) | In this Chapter “child trust fund business” means so much of a |
| |
company’s life assurance business as is referable to child trust fund |
| |
policies (but not including the reinsurance of such business). |
| |
(2) | In this section “child trust fund policy” means a policy of life |
| |
insurance which is an investment under a child trust fund (within |
| 10 |
the meaning of the Child Trust Funds Act 2004). |
| |
431BB | Meaning of “individual savings account business” |
| |
(1) | In this Chapter “individual savings account business” means so |
| |
much of a company’s life assurance business as is referable to |
| |
individual savings account policies (but not including the |
| 15 |
reinsurance of such business). |
| |
(2) | In this section “individual savings account policy” means a policy of |
| |
life insurance which is an investment of a kind specified in |
| |
regulations made by virtue of section 695(1) of ITTOIA 2005.” |
| |
9 (1) | Section 431D (meaning of “overseas life assurance business”) is amended as |
| 20 |
| |
(2) | For subsection (1) substitute— |
| |
“(1) | In this Chapter “overseas life assurance business” means so much of |
| |
a company’s relevant life assurance business as is with a policy |
| |
holder or annuitant not residing in the United Kingdom (but not |
| 25 |
including the reinsurance of such business). |
| |
(1A) | In subsection (1) above “relevant life assurance business” means life |
| |
assurance business other than— |
| |
| |
(b) | individual savings account business, |
| 30 |
(c) | child trust fund business, and |
| |
(d) | business of any description prescribed by regulations made |
| |
by the Commissioners for Her Majesty’s Revenue and |
| |
| |
(3) | In subsections (2) and (4), for “(1)” substitute “(1A)”. |
| 35 |
(4) | In subsection (4), insert at the end “(including provision amending any |
| |
enactment or any instrument made under an enactment)”. |
| |
10 | After section 431E insert— |
| |
“431EA | Meaning of “gross roll-up business” |
| |
In this Chapter “gross roll-up business” means business of any of the |
| 40 |
| |
| |
(b) | child trust fund business; |
| |
|
| |
|
| |
|
(c) | individual savings account business; |
| |
(d) | life reinsurance business; and |
| |
(e) | overseas life assurance business.” |
| |
11 | In section 431F (meaning of “basic life assurance and general annuity |
| |
business”), for the words from “(including” to the end substitute “other than |
| 5 |
| |
12 | In section 432ZA(7) (linked assets), for “long-term business other than life |
| |
assurance” (in both places) substitute “PHI”. |
| |
13 (1) | Section 432A (apportionment of income and gains) is amended as follows. |
| |
(2) | In subsection (1A), for “shall be” substitute “is”. |
| 10 |
(3) | In subsection (2), for paragraphs (a) to (f) substitute— |
| |
“(a) | basic life assurance and general annuity business, |
| |
(b) | gross roll-up business, and |
| |
| |
(4) | In subsection (3), for “(apart from overseas life assurance business) shall be” |
| 15 |
| |
| |
(6) | Before subsection (5) insert— |
| |
“(4A) | Income arising from, and gains or losses accruing on the disposal of, |
| |
foreign currency assets is referable to gross roll-up business.” |
| 20 |
| |
(a) | for “shall be” substitute “is”, and |
| |
(b) | omit “(apart from overseas life assurance business)”. |
| |
(8) | For subsections (6) to (6AA) substitute— |
| |
“(6) | For the purposes of subsection (5) above “the relevant fraction”, in |
| 25 |
relation to basic life assurance and general annuity business, is—![equation: over[char[A],plus[char[A],char[B],char[C]]]](missing.gif) |
| |
| |
| |
(a) | the mean of the opening and closing liabilities of the |
| |
basic life assurance and general annuity business (but |
| 30 |
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 of business, |
| |
(b) | if there has been a relevant reattribution, the mean of |
| 35 |
the opening and closing amounts of the shareholders’ |
| |
| |
(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; |
| 40 |
| |
|
| |
|
| |
|
(a) | the mean of the opening and closing liabilities of the |
| |
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 |
| 5 |
| |
(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 |
| |
| 10 |
(a) | the mean of the opening and closing liabilities of the |
| |
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 |
| 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. |
| |
(6A) | For the purposes of subsection (5) above “the relevant fraction”, in |
| 20 |
relation to gross roll-up business, is—![equation: over[char[B],plus[char[A],char[B],char[C]]]](missing.gif) |
| |
| 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. |
| 25 |
(6C) | But if the denominator found in accordance with subsection (6), (6A) |
| |
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.” |
| |
| 30 |
(a) | for “and (6A)” substitute “, (6A) and (6B)”, |
| |
(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)”. |
| 35 |
(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 |
| 40 |
| |
| |
|
| |
|
| |
|
(3) | In subsection (4), for paragraphs (a) to (d) substitute— |
| |
“(a) | basic life assurance and general annuity business; |
| |
(b) | gross roll-up business; and |
| |
| |
(4) | In subsection (5), omit “(3) or”. |
| 5 |
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 |
| |
| |
| 10 |
(a) | for “432F” substitute “432G”, and |
| |
(b) | for “any category of life assurance business” substitute “gross roll-up |
| |
| |
(3) | In subsection (2), for “432F” substitute “432G”. |
| |
| 15 |
(a) | for “Sections 432C and 432D apply” substitute “Section 432C |
| |
| |
(b) | insert at the end “(and section 432G applies in either case)”. |
| |
| |
(a) | for “sections 432C and 432D” substitute “section 432C”, |
| 20 |
(b) | in paragraph (a), for “apply” substitute “applies”, and |
| |
(c) | omit paragraph (b) and the word “and” before it. |
| |
| |
(a) | for the words from “any category” to the end of paragraph (b) |
| |
substitute “gross roll-up business”, and |
| 25 |
(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”. |
| |
(8) | In subsection (7), omit “the relevant fraction of” (in both places). |
| |
(9) | In subsection (8A), omit “the relevant fraction of”. |
| 30 |
(10) | In subsection (8C), omit “the relevant fraction of”. |
| |
(11) | In subsection (9), omit the definitions of— |
| |
(a) | “the relevant fraction”, and |
| |
(b) | “the section 83 net amount”. |
| |
| 35 |
(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— |
| |
“B is the amount that would be given by A if A |
| 40 |
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.”.” |
| |
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 |
| 5 |
to life assurance business or to gross roll-up business. |
| |
(2) | In this section “the net amount” means the aggregate of the amounts |
| |
| |
(a) | as investment income, |
| |
(b) | as an increase in the value of assets, or |
| 10 |
| |
| less the aggregate of the amounts brought into account as a decrease |
| |
| |
(3) | To the extent that the net amount is attributable to— |
| |
(a) | assets linked to life assurance business, or |
| 15 |
(b) | foreign currency assets, |
| |
| it is referable to life assurance business. |
| |
(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. |
| 20 |
(5) | For the purposes of subsection (4) above “the appropriate fraction” |
| |
is—![equation: over[char[A],plus[char[A],char[B]]]](missing.gif) |
| |
| |
A is the mean of the opening and closing liabilities of the |
| |
relevant business so far as referable to life assurance business |
| 25 |
(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 assets linked to the |
| |
relevant business so far as so referable and foreign currency |
| |
| 30 |
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 |
| |
net values of any assets linked to PHI business. |
| |
(6) | But if the denominator found in accordance with subsection (5) |
| 35 |
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, |
| 40 |
| it is referable to gross roll-up business. |
| |
(8) | There is also referable to gross roll-up business the relevant fraction |
| |
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 |
| |
relevant business so far as referable to gross roll-up business |
| |
(but taking that mean to be nil if it would otherwise be below |
| 5 |
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 |
| |
D is the mean of the opening and closing liabilities of the |
| |
relevant business so far as referable to basic life assurance |
| 10 |
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 |
| |
net values of any assets linked to either of those categories of |
| |
| 15 |
(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. |
| |
(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 |
| 20 |
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 |
| |
as income attributable to an asset of the fund would, by virtue of |
| |
section 432ZA, be referable to that category of business.” |
| 25 |
18 | Omit section 432D (section 432B apportionment: value of non-participating |
| |
| |
19 (1) | Section 432E (section 432B apportionment: participating funds) is amended |
| |
| |
(2) | For subsection (1) substitute— |
| 30 |
“(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) |
| |
| |
(b) | if greater, the amount determined in accordance with |
| 35 |
| |
(1A) | In this section “the net amount” means the aggregate of the amounts |
| |
| |
(a) | as investment income, |
| |
(b) | as an increase in the value of assets, or |
| 40 |
| |
| less the aggregate of the amounts brought into account as a decrease |
| |
| |
| |
|
| |
|