Finance Act 2007

Income and Corporation Taxes Act 1988 (c. 1)

13(1)Section 432A (apportionment of income and gains) is amended as follows.

(2)In subsection (1A), for “shall be” substitute “is”.

(3)In subsection (2), for paragraphs (a) to (f) substitute—

“(a)basic life assurance and general annuity business,

(b)gross roll-up business, and

(c)PHI business.”

(4)In subsection (3), for “(apart from overseas life assurance business) shall be” substitute “is”.

(5)Omit subsection (4).

(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.”

(7)In subsection (5)—

(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 relation to basic life assurance and general annuity business, is—

(6A)For the purposes of subsection (5) above “the relevant fraction”, in relation to gross roll-up business, is—

(6B)For the purposes of subsection (5) above “the relevant fraction”, in relation to PHI business, is—

(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.”

(9)In subsection (7)—

(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)”.

(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 subsection (6)”.

(12)Omit subsection (9).