Office of Public Sector Information
SCHEDULE 9 continued
9 In FA 1989, omit section 82C (relevant financial reinsurance contracts).
10 (1) Section 83 of FA 1989 (receipts to be taken into account) is amended as follows.
(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 earlier period of account) as part of total expenditure or as a business transfer-out,”.
(3) In that sentence (as amended by sub-paragraph (2))—
(a) for “as a business transfer out” substitute “by being netted off against incomings in lines 11 to 15 of a revenue account”, and
(b) for the words after “value of the assets of that fund” substitute “except to the extent that any of the exclusions in subsections (2C) to (2E) below apply.”
(4) Omit the second sentence of subsection (2B).
(5) For subsection (2E) substitute—
“(2E) Assets transferred by an insurance business transfer scheme are excluded from subsection (2B) above.”
11 (1) FA 1989 is amended as follows.
(2) Omit—
(a) in section 83, subsections (3) to (7) and, in subsection (8), the definitions of “add”, “demutualisation” and “total reinsurance” (which relate to losses where assets added to long-term insurance fund),
(b) section 83AA (amounts added to long-term insurance fund in excess of loss), and
(c) section 83AB (treatment of surplus where there is subsequent transfer from company etc).
(3) In section 83B(3) (changes in recognised accounts: attribution of amounts carried forward), for “83AB” substitute “83ZA”.
12 In section 436A(3) of ICTA (gross roll-up business), for “83AB” substitute “83ZA”.
13 (1) Paragraph 16 of Schedule 7 to FA 1991 (transitional relief for old general annuity contracts) is amended as follows.
(2) In sub-paragraph (7), in the definition of “old annuity contract”, insert at the end “(including one forming part of the business transferred to another insurance company by an insurance business transfer scheme)”.
(3) After that sub-paragraph insert—
“(8) Where—
(a) business is transferred to an insurance company by an insurance business transfer scheme during an accounting period of the company, and
(b) the business transferred consists of or includes old annuity contracts (“the transferred contracts”),
the reference in the definition of R1 in sub-paragraph (2) above to the company’s opening liabilities for the accounting period is, in relation to the transferred contracts, a reference to the company’s liabilities in respect of the transferred contracts immediately after the transfer.”
14 (1) TCGA 1992 is amended as follows.
(2) In section 211 (application of section 139), for subsections (2) and (2A) substitute—
“(2) Where this section applies the transferor and the transferee are treated for the purposes of corporation tax on chargeable gains as if any assets included in the transfer which—
(a) immediately before they are acquired by the transferee, were assets of the transferor’s long-term insurance fund, and
(b) immediately after they are so acquired are assets of the transferee’s long-term insurance fund,
were acquired for a consideration of such amount as would secure that neither a gain nor a loss would accrue to the transferor on the disposal.
(3) Subsection (2) above is subject to section 212.”
(3) In section 35(3)(d) (re-basing: exceptions), after “171,” insert “211,”.
15 In paragraph 57 of Schedule 8 to FA 1995 (application of provisions made by that Schedule), after sub-paragraph (2) (which disapplies section 442A of ICTA in relation to the reinsurance of policies and contracts made and reinsured before 29th November 1994) insert—
“(3) Where business consisting of or including an arrangement for the reinsurance of a policy or contract made before 29th November 1994 which was effected before that date has been transferred by an insurance business transfer scheme sub-paragraph (2) has effect in relation to the transferee.”
16 (1) The Treasury may by order make provision in relation to insurance business transfer schemes.
(2) The power conferred by sub-paragraph (1) includes power to amend or repeal any provision of the Corporation Tax Acts relating to insurance business transfer schemes and otherwise to amend the Corporation Tax Acts.
(3) The power conferred by sub-paragraph (1) includes power to make—
(a) different provision for different cases or otherwise for different purposes, and
(b) incidental, supplementary, consequential or transitional provisions and savings.
(4) Provision made by an order under this paragraph may be made so as to have effect in relation to periods of account current when it is made.
(5) No order may be made under this paragraph unless a draft of the statutory instrument containing it has been laid before the House of Commons before 1st April 2008 and has been approved by a resolution of that House.
17 (1) The amendments made by paragraphs 1 to 3 and 13 to 15 have effect in relation to periods of account beginning on or after 1st January 2007.
(2) The amendments made by paragraphs 4, 6 to 9, 10(3) to (5), 11 and 12 have effect in accordance with provision made by an order made by the Treasury.
(3) But the amendments made by paragraphs 11 and 12 also have effect in relation to periods of account beginning on or after 1st January 2007 where the transfer of business or demutualisation concerned took place before 21st March 2007.
(4) The amendment made by paragraph 5 has effect in relation to transfers of business with a transfer date after 21st March 2007.
(5) The amendment made by paragraph 10(2) has effect in relation to transfers taking place on or after 6th December 2006.
Finance Act 2007