|
| |
|
| |
(1) | For the purposes of section 444AB the relevant amount in relation to |
| |
assets that are retained assets is the lesser of FVA and UTA, where— |
| |
(a) | FVA is the fair value of the assets on the transfer date, and |
| |
(b) | UTA is the amount by which the fair value of the assets of the |
| 5 |
long-term insurance fund of the transferor immediately |
| |
before the transfer date exceeds the amount shown (or |
| |
treated as shown) in line 32 of Form 40 in the periodical |
| |
return of the transferor covering the transfer date. |
| |
(2) | See section 444AA for the meaning of “the transfer date” in this |
| 10 |
| |
444ABC | Transfer scheme transferring part of business: transferor |
| |
(1) | This section applies where an insurance business transfer scheme |
| |
has effect to transfer part (but not the whole or substantially the |
| |
whole) of the long-term business of a person (“the transferor”) to |
| 15 |
another person (“the transferee”) and the condition in subsection (2) |
| |
| |
(2) | That condition is that any of the assets of the transferor’s long-term |
| |
insurance fund which are transferred from the transferor to the |
| |
transferee by the insurance business transfer scheme are not, |
| 20 |
immediately after their transfer— |
| |
(a) | if the transferee is an insurance company, assets of the |
| |
transferee’s long-term insurance fund, or |
| |
(b) | if the transferee is not an insurance company, assets of a with- |
| |
profits fund of the transferee, |
| 25 |
| (“relevant non-transferred assets”). |
| |
(3) | The relevant amount in relation to the relevant non-transferred |
| |
assets (see subsection (4) below) is to be taken into account under |
| |
section 83(2) of the Finance Act 1989 as an increase in value of the |
| |
assets of the long-term insurance fund of the transferor for the period |
| 30 |
of account covering the transfer date. |
| |
(4) | The relevant amount in relation to the relevant non-transferred |
| |
assets is—![equation: plus[times[char[F],char[V],char[A]],minus[times[char[B],char[T],char[O]]]]](missing.gif) |
| |
| |
FVA is the fair value of the assets on the transfer date, and |
| 35 |
BTO is any amount brought into account in respect of the assets |
| |
as a business transfer-out. |
| |
(5) | See section 444AA for the meaning of “the transfer date” in this |
| |
| |
(2) | In section 432E(2A) of ICTA (apportionments: participating funds)— |
| 40 |
(a) | before “444AF(2)” insert “444AB, 444ABC,”, and |
| |
(b) | after paragraph (a) insert— |
| |
“(aa) | section 444AB or 444ABC of this Act;”. |
| |
|
| |
|
| |
|
Transferor’s period of account including transfer |
| |
5 | In ICTA, after section 444ABC (inserted by paragraph 4) insert— |
| |
“444ABD | Transferor’s period of account including transfer |
| |
(1) | Any profits representing the amount by which— |
| |
(a) | the value of the liabilities transferred by an insurance |
| 5 |
business transfer scheme, exceeds |
| |
(b) | the value of the assets transferred by the insurance business |
| |
transfer scheme shown (or treated as shown) in line 32 of the |
| |
periodical return of the transferor for the period of account of |
| |
the transferor including the transfer date, |
| 10 |
| are to be taken into account as profits of that period of account. |
| |
(2) | See section 444AA for the meaning of “the transfer date” in this |
| |
| |
Transfer schemes: taxing the transferee |
| |
6 (1) | In ICTA, for section 444AC substitute— |
| 15 |
“444AC | Transfer schemes transferring whole of business: reduction in |
| |
| |
(1) | This section applies where an insurance business transfer scheme |
| |
has effect to transfer the whole, or substantially the whole, of the |
| |
long-term business of a person (“the transferor”) to another person |
| 20 |
(“the transferee”) and conditions A and B are met. |
| |
(2) | Condition A is that the transferor did not carry on life assurance |
| |
business that is mutual business during the relevant period of |
| |
| |
(3) | Condition B is that an amount is shown (or treated as shown) in line |
| 25 |
13 of Form 14 in the periodical return of the transferor covering the |
| |
relevant period of account. |
| |
(4) | The amount which (apart from this section) would be regarded as |
| |
other income of the transferee for the purposes of section 83(2)(e) of |
| |
the Finance Act 1989 for the period of account of the transferee which |
| 30 |
includes the transfer date is to be reduced by an amount equal to the |
| |
| |
(5) | In subsection (4) above “the transferred surplus” means the amount |
| |
shown (or treated as shown) in line 13 of Form 14 in the periodical |
| |
return of the transferor covering the relevant period of account. |
| 35 |
(6) | See section 444AA for the meaning of “the transfer date”, and section |
| |
444AB for the meaning of “the relevant period of account”, in this |
| |
| |
444ACZA | Transfer schemes transferring part of business: reduction in |
| |
| 40 |
(1) | This section applies where an insurance business transfer scheme |
| |
has effect to transfer part (but not the whole or substantially the |
| |
whole) of the long-term business of a person (“the transferor”) to |
| |
|
| |
|
| |
|
another person (“the transferee”) and the condition in subsection (2) |
| |
| |
(2) | The condition is that the transferor did not carry on life assurance |
| |
business that is mutual business during the period of account of the |
| |
transferor covering the transfer date. |
| 5 |
(3) | The amount which (apart from this section) would be regarded as |
| |
other income of the transferee for the purposes of section 83(2)(e) of |
| |
the Finance Act 1989 for the period of account of the transferee which |
| |
includes the transfer date is to be reduced by an amount equal to the |
| |
| 10 |
(4) | In subsection (4) above “the transferred surplus” means such part of |
| |
the amount shown (or treated as shown) in line 13 of Form 14 in the |
| |
periodical return of the transferor covering the last period of account |
| |
of the transferor ending before the transfer date as it is just and |
| |
reasonable to regard as being attributable to the transfer. |
| 15 |
(5) | See section 444AA for the meaning of “the transfer date” in this |
| |
| |
(2) | In section 83(2A) of FA 1989 (receipts not to be taken into account), omit |
| |
| |
| 20 |
7 (1) | In ICTA, omit section 444AD (transfers of business: modification of section |
| |
| |
(2) | In section 83YA(7) of FA 1989 (changes in value of assets brought into |
| |
account: transfer-in amount), for the words after “if” substitute “a transfer |
| |
takes place in the following period of account; and the amount of the |
| 25 |
transfer-in amount for the previous period of account is any amount by |
| |
| |
(a) | the fair value of such of the assets of the long-term insurance |
| |
fund of the company immediately after the transfer as were |
| |
assets of the transferor’s long-term insurance fund |
| 30 |
immediately before the transfer, exceeds |
| |
(b) | the amount of any business transfer-in brought into account |
| |
in accordance with section 83(2)(e) in relation to the transfer.” |
| |
Transfer schemes: anti-avoidance |
| |
8 (1) | In ICTA, before section 444AF (and the italic cross-heading before it) |
| 35 |
| |
“444AEA | Transfer schemes: anti-avoidance rule |
| |
(1) | This section applies where— |
| |
(a) | as a result of the whole or any part of transfer scheme |
| |
arrangements involving the transfer of long-term business |
| 40 |
from one person (“the transferor”) to another (“the |
| |
transferee”) a Case I advantage is obtained by the transferor |
| |
or the transferee (or by both), and |
| |
|
| |
|
| |
|
(b) | the sole or main purpose, or one of the main purposes, of the |
| |
whole or any part of the transfer scheme arrangements is the |
| |
obtaining of that Case I advantage. |
| |
(2) | In subsection (1) above “transfer scheme arrangements” means an |
| |
insurance business transfer scheme (“the relevant transfer scheme”) |
| 5 |
together with any relevant associated operations. |
| |
(3) | If a Case I advantage is obtained by the transferor (see subsection (1) |
| |
of section 444AEB), the amount of the transferor’s Case I advantage |
| |
(see subsection (2) of that section) is to be taken into account as an |
| |
increase in value of the assets of the long-term insurance fund of the |
| 10 |
transferor for the period of account of the transferor covering the |
| |
| |
(4) | If a Case I advantage is obtained by the transferee (see subsection (1) |
| |
of section 444AEC), the amount of the transferee’s Case I advantage |
| |
(see subsection (2) of that section) is to be taken into account as an |
| 15 |
increase in value of the assets of the long-term insurance fund of the |
| |
transferee for the first period of account of the transferee ending after |
| |
| |
(5) | In this section and sections 444AEB and 444AEC “relevant associated |
| |
operations”, in relation to the relevant transfer scheme, means— |
| 20 |
(a) | any other insurance business transfer scheme, |
| |
(b) | any contract of reinsurance, |
| |
(c) | any reconstruction or amalgamation involving the transferor, |
| |
a dependant of the transferor which is an insurance |
| |
undertaking or the transferee, or |
| 25 |
(d) | any surplus-increasing transfer of assets, |
| |
| which is effected in connection with the relevant transfer scheme. |
| |
(6) | In subsection (5) above— |
| |
“dependant” and “insurance undertaking” have the same |
| |
meaning as in the Insurance Prudential Sourcebook, and |
| 30 |
“surplus-increasing transfer of assets” means a transfer of assets |
| |
of the transferor’s long-term insurance fund to the transferee |
| |
which is not brought into account for any period of account |
| |
of the transferee but increases the amount of total surplus |
| |
shown in line 39 of Form 58 in any periodical return of the |
| 35 |
| |
(7) | See section 444AA for the meaning of “the transfer date” in this |
| |
| |
444AEB | Case I advantage: transferor |
| |
(1) | A Case I advantage is obtained by the transferor if— |
| 40 |
(a) | Case I profits of its life assurance business for a period of |
| |
account to which this section applies are less than they would |
| |
be but for the transfer scheme arrangements or any part of the |
| |
transfer scheme arrangements, or |
| |
(b) | Case I losses of its life assurance business for such a period of |
| 45 |
account are greater than they would be but for the transfer |
| |
scheme arrangements or any part of the transfer scheme |
| |
| |
|
| |
|
| |
|
(2) | If a Case I advantage is obtained by the transferor, the amount of the |
| |
Case I advantage is the aggregate of— |
| |
(a) | the amounts (if any) by which Case I profits for each period |
| |
of account to which this section applies are less than they |
| |
would be but for the transfer scheme arrangements or part, |
| 5 |
| |
(b) | the amounts (if any) by which Case I losses for each such |
| |
period of account are greater than they would be but for the |
| |
transfer scheme arrangements or part. |
| |
(3) | This section applies to a period of account if it is— |
| 10 |
(a) | the period of account of the transferor covering the transfer |
| |
| |
(b) | any earlier period of account of the transferor, or |
| |
(c) | where any relevant associated operations are effected in any |
| |
later period of account, that period of account. |
| 15 |
(4) | In this section and section 444AEC “Case I profits” and “Case I |
| |
losses” means profits and losses computed in accordance with the |
| |
provisions of Case I of Schedule D. |
| |
(5) | See section 444AA for the meaning of “the transfer date”, and section |
| |
444AEA for the meaning of “relevant associated operations”, in this |
| 20 |
| |
444AEC | Case I advantage: transferee |
| |
(1) | A Case I advantage is obtained by the transferee if— |
| |
(a) | Case I profits of its life assurance business for a period of |
| |
account to which this section applies are less than they would |
| 25 |
be but for the transfer scheme arrangements or any part of the |
| |
transfer scheme arrangements, or |
| |
(b) | Case I losses of its life assurance business for such a period of |
| |
account are greater than they would be but for the transfer |
| |
scheme arrangements or any part of the transfer scheme |
| 30 |
| |
(2) | If a Case I advantage is obtained by the transferee, the amount of the |
| |
| |
(a) | the amount by which Case I profits for each period of account |
| |
to which this section applies are less than they would be but |
| 35 |
for the transfer scheme arrangements or part, or |
| |
(b) | the amount by which Case I losses for each such period of |
| |
account are greater than they would be but for the transfer |
| |
scheme arrangements or part. |
| |
(3) | This section applies to a period of account if it is— |
| 40 |
(a) | the first period of account of the transferee ending after the |
| |
transfer date or after the effecting of the first of any relevant |
| |
associated operations (if that occurs before the transfer date), |
| |
(b) | the second period of account of the transferee ending after |
| |
the transfer date or after the effecting of the last of any |
| 45 |
relevant associated operations (if that occurs after the transfer |
| |
| |
(c) | any intervening period of account. |
| |
|
| |
|
| |
|
(4) | See section 444AA for the meaning of “the transfer date”, section |
| |
444AEA for the meaning of “relevant associated operations” and |
| |
section 444AEB for the meaning of “Case I profits” and “Case I |
| |
losses”, in this section. |
| |
444AED | Clearance: no avoidance or group advantage |
| 5 |
(1) | Section 444AEA does not apply in relation to the transferor or the |
| |
transferee if, on an application under this section, the Commissioners |
| |
for Her Majesty’s Revenue and Customs (“the HMRC |
| |
Commissioners”) have given a notice under subsection (2) below. |
| |
(2) | A notice under this subsection is a notice stating that the HMRC |
| 10 |
Commissioners are satisfied— |
| |
(a) | that the obtaining of a Case I advantage by the applicant is |
| |
not the sole or main purpose of the whole or any part of the |
| |
transfer scheme arrangements, or |
| |
(b) | that the transferor and the transferee are members of the |
| 15 |
same group of companies and that there is no advantage to |
| |
the group arising from any Case I advantage obtained by the |
| |
transferor or by the transferee. |
| |
(3) | For the purposes of this section there is no advantage to a group |
| |
arising from any Case I advantage obtained by the transferor or by |
| 20 |
| |
(a) | as a result of transfer scheme arrangements, there is an |
| |
increase in the liability to corporation tax of one or more |
| |
companies which are members of the group of companies, |
| |
| 25 |
(b) | the amount (or aggregate amount) of that increase is not less |
| |
than the reduction in the liability to corporation tax of the |
| |
transferor or the transferee (or both) arising from the |
| |
obtaining of the Case I advantage. |
| |
(4) | An application under this section must be in writing and contain |
| 30 |
particulars of the transfer scheme arrangements. |
| |
(5) | The HMRC Commissioners may by notice require the applicant to |
| |
provide further particulars in order to enable them to determine the |
| |
| |
(6) | A requirement may be imposed under subsection (5) above within 30 |
| 35 |
days of the receipt of the application or of any further particulars |
| |
required under that subsection. |
| |
(7) | If a notice under subsection (5) above is not complied with within 30 |
| |
days or such longer period as the HMRC Commissioners may allow, |
| |
they need not proceed further on the application. |
| 40 |
(8) | The HMRC Commissioners must give notice of their decision on an |
| |
application under this section to the applicant within 30 days of |
| |
receiving the application or, if they give a notice under subsection (5) |
| |
above, within 30 days of that notice being complied with. |
| |
(9) | If the HMRC Commissioners— |
| 45 |
(a) | give notice to the applicant under subsection (8) above that |
| |
they are not satisfied as mentioned in subsection (2) above, or |
| |
|
| |
|
| |
|
(b) | do not comply with subsection (8) above, |
| |
| the applicant may require them to transmit the application to the |
| |
| |
(10) | A requirement under subsection (9) above must be imposed within |
| |
30 days of the giving of the notice or the failure to comply and must |
| 5 |
be accompanied by any notice given under subsection (5) above and |
| |
further particulars provided pursuant to any such notice. |
| |
(11) | Any notice given by the Special Commissioners has effect for the |
| |
purposes of subsection (1) above as if it were given by the HMRC |
| |
| 10 |
(12) | If any particulars provided under this section do not fully and |
| |
accurately disclose all facts and considerations material for the |
| |
decision of the HMRC Commissioners or the Special |
| |
Commissioners, any resulting notice that they are satisfied as |
| |
mentioned in subsection (2) above is void. |
| 15 |
(13) | For the purposes of this section two companies are members of the |
| |
same group of companies if they are for the purposes of Chapter 4 of |
| |
| |
(2) | In section 432E(2A) of ICTA (as amended by paragraph 4(2)), after |
| |
“444ABC,” insert “444AEA,” and after paragraph (aa) insert— |
| 20 |
“(ab) | section 444AEA of this Act;”. |
| |
| |
9 | In FA 1989, omit section 82C (relevant financial reinsurance contracts). |
| |
Transfers: receipts to be taken into account |
| |
10 (1) | Section 83 of FA 1989 (receipts to be taken into account) is amended as |
| 25 |
| |
(2) | In the first sentence of subsection (2B), for the words from “but the transfer” |
| |
to “the time of the transfer” substitute “the fair value of the assets at the time |
| |
of the transfer, reduced by any amount brought into account in respect of |
| |
them (for the period of account in which the transfer takes place or any |
| 30 |
earlier period of account) as part of total expenditure or as a business |
| |
| |
(3) | In that sentence (as amended by sub-paragraph (2))— |
| |
(a) | omit “or as a business transfer-out”, and |
| |
(b) | for the words after “value of the assets of that fund” substitute |
| 35 |
“except to the extent that any of the exclusions in subsections (2C) to |
| |
| |
(4) | Omit the second sentence of subsection (2B). |
| |
(5) | For subsection (2E) substitute— |
| |
“(2E) | Assets transferred by an insurance business transfer scheme are |
| 40 |
excluded from subsection (2B) above.” |
| |
|
| |
|