SCHEDULES
F1F1SCHEDULE 18
F3 Application of insurance companies provisions relating to loan relationships
Sch. 18 paras. 1, 1A and cross-heading substituted for Sch. 18 paras. 1 and 2 (29.4.1996 with effect as mentioned in s. 105(1) of the amending Act) by 1996 c. 8, s. 104, Sch. 14 para. 79 (with savings etc. in Pt. IV Ch. II (ss. 80-105))
F2C11
1
Part I of Schedule 11 to the Finance Act 1996 (special provision with respect to loan relationships for insurance companies) shall have effect (subject to sub-paragraph (2) below) in relation to qualifying contracts as it has effect in relation to loan relationships which are creditor relationships within the meaning of Chapter II of Part IV of that Act.
2
That Part of that Schedule shall have effect in its application in relation to qualifying contracts, as if—
a
references to section 82(2) of the Finance Act 1996 were references to section 159 of this Act, and
b
references to credits and debits given by Chapter II of Part IV of that Act in respect of a loan relationship were references, respectively, to the profits and losses deriving from the contract.
F41A
C21
Where the I minus E basis is applied for any accounting period in respect of the life assurance business or capital redemption business of any insurance company, this Chapter shall have effect for that period in relation to contracts and options held for the purposes of that business as if the words in subsection (10) of section 150A from “but references” onwards were omitted.
2
Expressions used in sub-paragraph (1) above and in Part I of Schedule 11 to the Finance Act 1996 have the same meanings in this paragraph as in that Part of that Schedule.
Life assurance business: Case I of Schedule D
2
1
Subject to sub-paragraph (2) below, sub-paragraphs (3) and (4) below apply where—
a
a qualifying contract was at any time in an accounting period of an insurance company held by the company for the purposes of any life assurance business carried on by it, and
b
the profits of the company in respect of that business are, for the purposes of the Tax Acts, computed in accordance with the provisions of the Taxes Act 1988 applicable to Case I of Schedule D.
2
Where the qualifying contract was held partly for the purposes of the life assurance business and partly for other purposes—
a
amounts A and B for the period shall be apportioned on a just and reasonable basis, and
b
any reference in sub-paragraph (3) or (4) below to either of those amounts shall be construed as a reference to so much of it as is referable to the life assurance business.
3
Notwithstanding anything in sections 159 and 160 of this Act, amount A for the period shall not—
a
under or by virtue of this Chapter be chargeable to corporation tax as profits of the company, or
b
be taken into account as a receipt in computing for the purposes of this Chapter the profits or losses of the company.
4
Notwithstanding anything in those sections, amount B for the period shall not—
a
be allowable as a deduction in computing for the purposes of this Chapter the profits or losses of the company, or
b
under or by virtue of this Chapter be allowable as a deduction in computing any other income or profits or gains or losses of the company for the purposes of the Tax Acts.
5
Subsection (5)(a) of section 173 of this Act applies for the purposes of this paragraph as it applies for the purposes of that section.
Non-life mutual business
3
1
Subject to sub-paragraph (2) below, sub-paragraph (3) below applies where a qualifying contract was at any time in an accounting period of a mutual trading company held by the company for the purposes of any non-life mutual business carried on by it.
2
Where the qualifying contract was held partly for the purposes of the non-life mutual business and partly for other purposes—
a
the profit or loss on the contract for the period shall be apportioned on a just and reasonable basis, and
b
any reference in sub-paragraph (3) below to that profit or loss shall be construed as a reference to so much of it as is referable to the non-life mutual business.
3
Notwithstanding anything in section 159 of this Act—
a
no part of the profit or loss on the contract for the period shall be treated for the purposes of the Tax Acts as a profit or loss of a trade or part of a trade, and
b
accordingly, the whole of that profit or loss shall be treated for the purposes of section 160 of this Act as a non-trading profit or loss.
Sch. 18 repealed (with effect as mentioned in s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), s. 141, Sch. 40 Pt. 3(13)