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| Schedule 17, page 247, line 1, leave out from beginning to end of line 43 on page |
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| Schedule 17, page 247, line 17, leave out from beginning to end of line 43 on page |
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| 248 and insert ‘carried on by the company, |
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| | (c) | income chargeable under Case V of Schedule D in respect of |
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| | any overseas property business treated as carried on by the |
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| | company under section 432AA, |
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| | (d) | other income of the company chargeable under Case V of |
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| | (e) | distributions received by the company from companies |
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| | resident in the United Kingdom, |
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| | (f) | credits in respect of any creditor relationships (within the |
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| | meaning of Chapter 2 of Part 4 of the Finance Act 1996) of the |
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| | (g) | credits in respect of any derivative contracts (within the |
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| | meaning of Schedule 26 to the Finance Act 2002) of the |
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| | (h) | any income of the company chargeable under Case III of |
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| | Schedule D in respect of annuities and other annual payments |
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| | within paragraph (b) of Case III of Schedule D as substituted |
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| | (i) | any credits brought into account by the company under Part 3 |
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| | of Schedule 29 to the Finance Act 2002 (intangible fixed |
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| | (j) | any income of the company chargeable under Case VI of |
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| | Schedule D, other than profits of the company chargeable |
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| | under section 436A (gross roll-up business). |
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| | (1ZB) | In subsection (1)(a) above “losses” means— |
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| | (a) | losses in respect of any separate Schedule A businesses |
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| | treated as carried on by the company under section 432AA, |
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| | (b) | losses in respect of any overseas property businesses treated |
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| | as carried on by the company under that section, |
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| | (c) | debits in respect of any creditor relationships (within the |
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| | meaning of Chapter 2 of Part 4 of the Finance Act 1996) of the |
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| | (d) | debits in respect of any derivative contracts (within the |
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| | meaning of Schedule 26 to the Finance Act 2002) of the |
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| | (e) | any debits brought into account by the company under Part 2 |
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| | of Schedule 29 to the Finance Act 2002 (intangible fixed |
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| | (f) | any losses of the company computed in the same way as |
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| | profits chargeable under Case VI of Schedule D, other than |
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| | any losses of gross roll-up business. |
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| | (1ZC) | For determining as mentioned in subsection (1) above what parts of |
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| | income or gains arising from the assets of the company’s long-term |
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| | insurance fund are referable to PHI business (to the extent that it would |
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| | not be the case by virtue of subsections (1ZA) and (1ZB))— |
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| | (a) | “income” also includes profits shown in the technical account, |
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| | (b) | “losses” also includes losses so shown.” |
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| | (4) | In subsection (1A), for “, all of the income and gains or losses referred to in |
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| | subsection (1) above is” substitute— |
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| | (a) | all of the income and losses referred to in paragraph (a) of |
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| | subsection (1) above, and |
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| | (b) | all of the gains and losses referred to in paragraph (b) of that |
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| | (5) | In subsection (3), after “Income” insert “or losses”. |
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| | (6) | After that subsection insert— |
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| | “(3A) | Amounts falling within— |
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| | (b) | section 85(2C) of the Finance Act 1989, or |
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| | (c) | section 85A of that Act, |
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| | | are directly referable to basic life assurance and general annuity |
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| | (7) | In subsection (4A), after “Income” insert “or losses”. |
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| | (8) | In subsection (5), for “income, gains or losses” substitute “income and losses |
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| | referred to in paragraph (a) of subsection (1) above, and any gains and losses |
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| | referred to in paragraph (b) of that subsection,”. |
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| | (a) | in paragraph (a), for “income, gains or losses” substitute “income and |
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| | losses referred to in paragraph (a) of subsection (1) above, and gains |
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| | and losses referred to in paragraph (b) of that subsection,” and insert |
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| | (b) | in paragraph (b), for “arising from the assets is, and gains or losses |
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| | accruing on the disposal of the assets are,” substitute “and losses |
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| | arising from the assets, and gains and losses accruing on the disposal |
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| | (c) | omit paragraph (c) and the “and” before it. |
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| | (10) | In consequence of the preceding provisions, omit the provisions specified in |
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| | (11) | The provisions mentioned in sub-paragraph (10) are— |
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| | (a) | section 432AB(2) of ICTA, |
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| | (b) | section 502H of that Act, |
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| | (c) | paragraph 3 of Schedule 11 to FA 1996, |
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| | (d) | paragraph 19(4) of Schedule 12 to FA 1997, |
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| | (e) | paragraphs 36(1) and (3) and 138(2) and (3) of Schedule 29 to FA |
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| | (f) | paragraph 19(4) of Schedule 9 to F(No.2)A 2005, and |
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| | (g) | paragraphs 13(2) and 44 of Schedule 7, and paragraph 5 of Schedule |
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| | (12) | The amendments made by this paragraph have effect in relation to accounting |
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| | periods beginning on or after 1 January 2008. |
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| | 17A(1) | In section 431 of ICTA (interpretative provisions relating to insurance |
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| | companies), after subsection (2YA) insert— |
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| | “(2YB) | “BLAGAB profits”, in relation to an accounting period of an |
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| | insurance company, means the company’s BLAGAB income and |
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| | gains for the period reduced (but not below nil) by the company’s |
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| | BLAGAB deductions for the period. |
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| | (2YC) | “BLAGAB income and gains”, in relation to an accounting period of |
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| | an insurance company, means the aggregate of— |
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| | (a) | income chargeable for the period under Schedule A or Case |
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| | III, V or VI of Schedule D so far as referable (in accordance |
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| | with section 432A) to the company’s basic life assurance and |
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| | general annuity business, |
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| | (b) | distributions received in the period from companies resident |
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| | in the United Kingdom so far as so referable, and |
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| | (c) | chargeable gains so far as so referable accruing to the |
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| | company in the period, but (subject to section 210A of the |
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| | 1992 Act) after deducting— |
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| | (i) | any allowable losses so referable and so accruing, and |
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| | (ii) | so far as they have not been allowed as a deduction |
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| | from chargeable gains in any previous accounting |
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| | period, any allowable losses so referable previously |
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| | |
| | (2YD) | “BLAGAB deductions”, in relation to an accounting period of an |
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| | insurance company, means the aggregate of— |
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| | (a) | amounts falling in respect of any non-trading deficits on the |
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| | company’s loan relationships to be brought into account in the |
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| | period in accordance with paragraph 4 of Schedule 11 to the |
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| | (b) | the expenses deduction given by Step 8 in section 76(7) for the |
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| | (2) | In section 755A(11C) of that Act (treatment of chargeable profits and |
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| | creditable tax apportioned to company carrying on life assurance business), |
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| | omit paragraph (b) and the “and” before it. |
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| | (3) | In section 85A of FA 1989 (excess adjusted Case I profits), for subsections (6) |
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| | “(6) | “The relevant income” means— |
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| | (a) | the company’s BLAGAB income and gains for the accounting |
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| | period (but excluding any amount within this section), and |
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| | (b) | profits of the company chargeable under Case VI of Schedule |
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| | D under section 436A of the Taxes Act 1988 (gross roll-up |
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| | business) for the accounting period.” |
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| | (4) | In section 88 of that Act (meaning of “policy holders’ share of profits”), for |
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| | subsections (3) to (3B) substitute— |
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| | “(3) | For the purposes of subsection (1) above the relevant profits of a |
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| | company for an accounting period consist of the aggregate of— |
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| | (a) | the company’s BLAGAB profits for the period, and |
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| | (b) | profits of the company chargeable under Case VI of Schedule |
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| | D under section 436A of the Taxes Act 1988 (gross roll-up |
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| | business) for the period.” |
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| | |
| | (a) | section 89(1B) of FA 1989, |
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| | (b) | in section 210A(10)(a) of TCGA 1992, “(within the meaning of |
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| | section 89(1B) of the Finance Act 1989)”, |
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| | (c) | paragraph 21(2) of Schedule 8 to FA 1995, |
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| | (d) | paragraph 2(1) of Schedule 11, and paragraph 56 of Schedule 14, to |
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| | (e) | paragraph 6(1) of Schedule 33 to FA 2003, |
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| | (f) | in paragraph 9(2) of Schedule 7 to FA 2004, paragraphs (a) to (c) and |
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| | the words from”; and, in consequence of” to the end, and |
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| | (g) | paragraphs 58 and 67(2) of Schedule 7, and paragraphs 15(3) and |
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| | 16(2) of Schedule 8, to FA 2007. |
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| | (6) | The amendments made by this paragraph have effect in relation to accounting |
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| | periods beginning on or after 1 January 2008.’. |
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| Schedule 17, page 249, line 11, at end insert— |
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| | ‘Group relief: gross profits to exclude relevant profits |
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| | 18A(1) | In section 434A of ICTA (computation of losses and limitation on relief), |
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| | “(4) | For the purposes of section 403, where the surrendering company is an |
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| | insurance company which is charged to tax under the I minus E basis |
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| | in respect of its life assurance business for the surrender period, the |
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| | company’s gross profits of that period do not include its relevant |
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| | profits (within the meaning of section 88 of the Finance Act 1989) for |
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| | that period; and expressions used in this subsection and section 403 |
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| | have the same meaning here as there.” |
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| | (2) | The amendment made by sub-paragraph (1) has effect in relation to accounting |
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| | periods beginning on or after 1 January 2008.’. |
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| Schedule 17, page 249, leave out lines 21 to 25. |
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| Schedule 17, page 249, line 35, at end insert— |
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| | ‘(2A) | In paragraph 17 (restriction on losses carried forward), omit— |
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| | (a) | in sub-paragraph (3)(b), “or (13)”, “and charges on income” and “and |
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| | (b) | in sub-paragraph (4), “or (13)”.’. |
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| Schedule 17, page 252, line 5, at end insert— |
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| | ‘Repeal of section 737D of ICTA |
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| | 32A(1) | In ICTA, omit section 737D (power to provide that manufactured payments |
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| | are to be treated as income eligible for relief under section 438). |
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| | (2) | In consequence of subsection (1), omit— |
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| | (a) | section 83(1) of FA 1995, |
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| | (b) | section 139(6) of FA 2006, and |
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| | (c) | paragraph 175 of Schedule 1 to ITA 2007.’. |
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| Schedule 17, page 252, line 5, at end insert— |
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| | 32B | In paragraph 12 of Schedule 12 to FA 2002 (insurance companies treated as |
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| | large companies), for the words following paragraph (b) substitute “the |
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| | company does not qualify as a small or medium-sized enterprise for the |
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| | purposes of Parts 1 to 3 of this Schedule or Schedule 20 to the Finance Act |
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| Schedule 17, page 252, line 5, at end insert— |
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| | ‘Section 89(7) of FA 1989 |
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| | 32C(1) | In section 89(7) of FA 1989 (policy holders’ share of profits), for “in respect |
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| | of losses in accordance with section 85A(4)” substitute “in accordance with |
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| | section 85A(4) in respect of losses incurred in an accounting period in which |
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| | 31 December 2002 is included or any later accounting period.” |
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| | (2) | The amendment made by this paragraph has effect in relation to accounting |
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| | periods beginning on or after 1 January 2008 and ending on or after 15 May |
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| Schedule 17, page 252, leave out lines 6 to 8 and insert— |
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| | ‘Commencement of Schedule 9 to FA 2007 |
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| | 33 (1) | Paragraph 17 of Schedule 9 to FA 2007 (transfers: commencement) is |
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| | (2) | In sub-paragraph (2), for “9, 10(3) to (5),” substitute “10(5),”. |
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| | (3) | In sub-paragraph (3)—’. |
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| Schedule 17, page 252, line 14, at end insert— |
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| | ‘(4) | After sub-paragraph (4) insert— |
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| | “(4A) | The amendment made by paragraph 9 has effect in relation to |
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| | contracts entered into in a period of account beginning on or after 1 |
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| | “(6) | The amendments made by paragraph 10(3) and (4) have effect in |
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| | relation to assets transferred on or after 1 January 2008.”’. |
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| Schedule 17, page 252, line 29, at end insert— |
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| | ‘Repeal of spent provision |
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| | 36 | In section 88(5) of FA 1989 (policy holders’ share of profits), omit the words |
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| | Schedule, as amended, Agreed to. |
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| Schedule 18, page 253, line 39, after ‘above,’ insert ‘or not so exempt by virtue of |
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| Schedule 18, page 254, line 4, at end insert— |
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| | ‘Extension of section 463 |
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| | 3A | In subsection (1) of section 463 (application of Corporation Tax Acts to life or |
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| | endowment business carried on by friendly societies), for “the life or |
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| | endowment” substitute “long-term”; and, accordingly, in the title of that |
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| | section, for “Life or endowment” substitute “Long-term”.’. |
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| | Schedule, as amended, Agreed to. |
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| | Clause 42 to 48 Agreed to. |
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| [Adjourned till Thursday at 9.00 a.m. |
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