The Insurance Companies (Corporation Tax Acts) (Miscellaneous Amendments) Order 2006

• Citation: S.I. 2006/3270
• Sections: 11

Section 1 Citation, commencement and effect

(1) This Order may be cited as the Insurance Companies (Corporation Tax Acts) (Miscellaneous Amendments) Order 2006 and comes into force on 31st December 2006.

(2) This Order has effect in relation to periods of account ending on or after 31 st December 2006.

Section 2 Amendment of the Income and Corporation Taxes Act 1988

The Income and Corporation Taxes Act 1988 is amended in accordance with articles 3 to 8.

Section 3 Amendment of the Income and Corporation Taxes Act 1988

In section 76(8)(c) (expenses of insurance companies) for “Integrated Prudential Sourcebook” substitute “Insurance Prudential Sourcebook”.

Section 4 Amendment of the Income and Corporation Taxes Act 1988

(1) Amend section 431 (interpretative provisions relating to insurance companies) as follows.

(2) In subsection (2) —

(a) after the definition of “free assets amount” insert—

“General Prudential Sourcebook” means the General Prudential Sourcebook made by the Financial Services Authority under the Financial Services and Markets Act 2000 ;

(b) in the definition of “insurance company” at the end add “but does not include an insurance special purpose vehicle;”;

(c) after the definition of “insurance company” insert—

“the Insurance Prudential Sourcebook” means the Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000;

“insurance special purpose vehicle” means any undertaking which assumes risks from insurance or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issue or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the reinsurance obligations of the undertaking;

(d) omit the definition of “the Integrated Prudential Sourcebook”;

(e) in the definition of “liabilities”—

(i) in paragraph (a) for “chapter 7.3 of the Integrated Prudential Sourcebook” substitute “section 1.2 of the Insurance Prudential Sourcebook”;

(ii) in paragraph (b) for “chapter 1.3 of that Sourcebook” substitute “section 1.3 of the General Prudential Sourcebook”; and

(f) in the definition of “value” for “chapter 1.3,” onwards substitute—

section 1.3 of the General Prudential Sourcebook, as read with section 2.1 of the Insurance Prudential Sourcebook;

(3) In subsection (2ZC)(d) —

(a) for “shareholder’s” substitute “shareholders’”; and

(b) for “transferor” substitute “transferee”.

Section 5 Amendment of the Income and Corporation Taxes Act 1988

In section 432A(8B) (apportionment of income and gains) in the definition of “inherited estate” for “Integrated Prudential Sourcebook” substitute “Insurance Prudential Sourcebook”.

Section 6 Amendment of the Income and Corporation Taxes Act 1988

In section 444AC (transfer of business: excess of assets or liabilities) —

(a) in subsections (2), (2A) and (5) for “the element of the transferee’s line 31 figure representing the transferor’s long-term insurance fund” substitute “the transferee’s line 31 amount in relation to the transfer”; and

(b) omit subsection (3).

Section 7 Amendment of the Income and Corporation Taxes Act 1988

In section 444AD(4)(b) (transfer of business: modification of section 83(2B)) for “the element of the transferee’s line 31 figure” substitute “the transferee’s line 31 amount in relation to the transfer”.

Section 8 Amendment of the Income and Corporation Taxes Act 1988

In section 755A (treatment of chargeable profits and creditable tax apportioned to company carrying on life assurance business) —

(a) after subsection (4) insert—

(4A) In any case where—

(a) paragraph 4 of Schedule 26 to this Act applies to a dividend received by the UK company, and

(b) but for this subsection, subsection (4) of section 804B of this Act would apply to that dividend,

the amount of credit for foreign tax in respect of that dividend shall be treated, for the purposes of that section, as wholly attributable to basic life assurance and general annuity business.

(b) in subsection (8) omit “or 2”; and

(c) omit subsection (9).

Section 9 Amendment of the Finance Act 1989

In the Finance Act 1989 —

(a) in section 83YA(11) (changes in value of assets brought into account: non-profit companies) in the definition of “with-profits fund”, and in section 83A(6) , for “Integrated Prudential Sourcebook” substitute “Insurance Prudential Sourcebook”; and

(b) in section 88(3) for “section 76(5)” substitute “section 76(7)”.

Section 10 Amendment of the Finance Act 1998

In section 42(5) of the Finance Act 1998 (which concerns the computation of profits of insurance companies chargeable to Case I or II of Schedule D) for “companies carrying on life insurance” substitute—

insurance companies (within the meaning of Chapter 1 of Part 12 of the Taxes Act 1988) in relation to their life assurance business

Section 11 Amendment of the Finance Act 2002

In Schedule 26 to the Finance Act 2002 (loan relationships and derivative contracts) —

(a) in paragraph 4(2A)(b) for “Rule 4.3.5 of the Integrated Prudential Sourcebook” substitute “Rule 3.2.5 of the Insurance Prudential Sourcebook;

(b) in paragraph 12(1) —

(i) after the entry relating to a hedging relationship between a relevant contract and an asset or liability insert—

Insurance Prudential Sourcebook (see sub-paragraph (15));

(ii) omit the entry relating to the Integrated Prudential Sourcebook;

(c) for paragraph 12(15) substitute—

(15) “Insurance Prudential Sourcebook” means the Prudential Sourcebook for Insurers made by the Financial Services Authority under the Financial Services and Markets Act 2000.