The Friendly Societies (Modification of the Corporation Tax Acts) (Amendment) Regulations 2007

Amendment of regulation 9

9.—(1) Regulation 9 (modifications of section 432A of the Taxes Act) is amended as follows.

(2) In paragraph (1), for “and (4)” substitute “, (4) to (8)”.

(3) In paragraph (2), in the inserted subsection (1E)—

(a) for paragraphs (a) to (c) substitute—

“(a) gross roll-up business,”, and

(b) in paragraph (e), for “Class IV” substitute “PHI”.

(4) For paragraphs (4) to (8) substitute—

“(4) In subsection (2)(1) for paragraphs (a) to (c) substitute—

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

(b) tax exempt basic life assurance and general annuity business,

(c) gross roll-up business,

(d) taxable PHI business, and

(e) tax exempt PHI business;”.

(5) For subsections (6) to (6C)(2) substitute—

“(6) For the purposes of subsection (5) above, “the relevant fraction”, in relation to taxable basic life assurance and general annuity business, is—

• 

where—

A is the aggregate of—

(a) the mean of the opening and closing liabilities of the taxable basic life assurance business (but taking that mean to be nil if it would otherwise be below nil) reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category, and

(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts;

B is the aggregate of—

(a) the mean of the opening and closing liabilities of the tax exempt basic life assurance business (but taking that mean to be nil if it would otherwise be below nil) reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category, and

(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts;

C is the aggregate of—

(a) the mean of the opening and closing liabilities of the gross roll-up business (but taking that mean to be nil if it would otherwise be below nil) reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category, and

(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts;

D is the aggregate of—

(a) the mean of the opening and closing liabilities of the taxable PHI business (but taking that mean to be nil if it would otherwise be below nil) reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category, and

(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts; and

E is the aggregate of—

(a) the mean of the opening and closing liabilities of the tax exempt PHI business (but taking that mean to be nil if it would otherwise be below nil) reduced (but not below nil) by the mean of the opening and closing net values of any assets directly referable to that category, and

(b) the mean of the appropriate parts (that is, the parts relating to that category) of the opening and closing amounts of the free assets amounts.

(6A) For the purposes of subsection (5) above, “the relevant fraction”, in relation to tax exempt basic life assurance and general annuity business, is—

• 

where A, B, C, D and E have the same meaning as in subsection (6) above.

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

• 

where A, B, C, D and E have the same meaning as in subsection (6) above.

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

• 

where A, B, C, D and E have the same meaning as in subsection (6) above.

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

• 

where A, B, C, D and E have the same meaning as in subsection (6) above.

(6E) But if the denominator found in accordance with subsection (6), (6A), (6B), (6C) or (6D) 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.”

(7) In subsection (7)(3) for “and (6B)” substitute “, (6B), (6C) and (6D)”.

(8) Omit—

(a) paragraph (b) of subsection (8)(4) and the word “and” which precedes it;

(b) subsections (8ZA)(5), (8A) and (8B).”

(1)

Section 432A, together with sections 432B, to 432E, was inserted by paragraph 4 of Schedule 6 to the Finance Act 1990 and subsection (2) of that section was substituted by paragraph 13(2) of Schedule 8 to the Finance Act 1995 (c. 4) and amended by section 167(2) of the Finance Act 1996, paragraph 8(4) of Schedule 7 to the Finance Act 2004 (c. 12) and paragraph 13(3) of Schedule 7 to the Finance Act 2007.

(2)

Subsections (6) to (6C) of section 432A were substituted for subsections (6) to (6AA) of that section by paragraph 13(8) of Schedule 7 to the Finance Act 2007.

(3)

Subsection (7) of section 432A was substituted by paragraph 13(4) of Schedule 8 to the Finance Act 1995 and amended by article 5(4) of S.I. 2005/3465 and paragraph 5 of Schedule 8 to the Finance Act 2007.

(4)

Subsections (8) to (8B) of section 432A were substituted for subsection (8) of that section by article 5(5) of S.I. 2005/3465 and amended by article 5 of S.I. 2006/3270 and paragraph 13(10) of Schedule 7 to the Finance Act 2007.

(5)

Subsection (8ZA) of section 432A was inserted by article 4(6) of S.I. 2007/1031and paragraph 13(11) of Schedule 7 to the Finance Act 2007.