Corporation Tax Act 2009

Chapter 17 Insurance companies

Effect of application of the I minus E basis: non-trading amounts

901 Effect of application of the I minus E basis: non-trading amounts

(1) The effect of applying the I minus E basis for an accounting period in relation to life assurance business carried on by an insurance company is as follows.

(2) Credits or debits falling to be brought into account under this Part in respect of intangible fixed assets of the company referable to that business are not brought into account as mentioned in section 747 (assets held for purposes of trade).

(3) Instead, those credits or debits are brought into account under section 751 (non-trading gains and losses) as non-trading credits or, as the case may be, non-trading debits.

Excluded assets and computer software

902 Excluded assets

(1) Except as respects royalties, this Part does not apply to an intangible fixed asset so far as it is held by an insurance company for the purposes of its life assurance business.

(2) Accordingly, section 810(1) (which makes provision in the same terms as subsection (1) in relation to assets held for the purposes of any mutual trade or business) does not apply in relation to assets held for the purposes of life assurance business.

(3) Subsection (1) does not apply to computer software.

(4) Sections 801 and 802 apply so far as assets are excluded by this section as they apply so far as assets are excluded because of sections 810 to 813.

903 Elections to exclude capital expenditure on computer software

(1) An insurance company that carries on life assurance business may make an election under section 815 (election to exclude capital expenditure on software) in respect of so much of any capital expenditure on computer software as is not referable to its basic life assurance and general annuity business.

(2) In subsection (1) “capital expenditure” has the same meaning as if this section were in CAA 2001.

Miscellaneous

904 Transfers of life assurance business: transfers of assets treated as tax-neutral

(1) A transfer of intangible fixed assets to which this section applies is tax-neutral for the purposes of this Part (see section 776).

(2) This section applies to a transfer of intangible fixed assets if—

(a) the assets are included in a transfer within subsection (3),

(b) immediately before the transfer the intangible fixed assets are chargeable intangible assets in relation to the company making the transfer, and

(c) immediately after the transfer the intangible fixed assets are chargeable intangible assets in relation to the company to which the transfer is made.

(3) A transfer is within this subsection if it is—

(a) a transfer of business consisting of the effecting or carrying out of long-term business which has effect under an insurance business transfer scheme, or

(b) a qualifying overseas transfer.

905 Pre-FA 2002 assets: Lloyd’s syndicate capacity

(1) The general rule in section 882 (this Part not to apply to pre-FA 2002 assets) does not apply if the intangible fixed asset consists of the rights of a member of Lloyd’s under a syndicate within the meaning of Chapter 5 of Part 4 of FA 1994 (taxation of corporate members of Lloyd's).

(2) This Part applies in relation to the asset as respects amounts to be brought into account for tax purposes in accounting periods ending on or after 1 April 2002.

(3) For the purposes of section 729(5) (writing down on accounting basis: calculation of amount of debit for tax purposes) as it applies to the first accounting period ending on or after 1 April 2002, the tax written down value of the asset must be calculated under section 742 in accordance with subsection (4).

(4) That value must be calculated as if the debits to be deducted under section 742 included all accounting losses previously recognised in respect of the asset.

(5) It does not matter for the purposes of subsection (4) if those accounting losses previously gave rise to a deduction for tax purposes.

(6) This subsection applies if an asset within subsection (1)—

(a) was acquired before the beginning of the first accounting period ending on or after 1 April 2002, and

(b) is a chargeable intangible asset immediately after the beginning of that period.

(7) If subsection (6) applies, the asset is treated for the purposes of Chapter 7 (roll-over relief on realisation and reinvestment) as if it had been a chargeable intangible asset at all material times between its acquisition and the beginning of the first accounting period ending on or after 1 April 2002.

(8) For the purposes of this section, an asset is treated as acquired at the same time as it would be treated as acquired for the purposes of section 882 (see sections 883 to 885).