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Income and Corporation Taxes Act 1988

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Changes over time for: Cross Heading: Classes of life assurance business

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Version Superseded: 06/04/2005

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Income and Corporation Taxes Act 1988, Cross Heading: Classes of life assurance business is up to date with all changes known to be in force on or before 11 June 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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[F1Classes of life assurance business]U.K.

Textual Amendments

F1Ss. 431B-431F and cross-heading inserted (with effect in accordance with Sch. 8 paras. 55, 57 of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 2

431B Meaning of “pension business”.U.K.

(1)In this Chapter “pension business” means so much of a company’s life assurance business as is referable to contracts of the following descriptions or to the reinsurance of liabilities under such contracts.

(2)The descriptions of contracts are—

(a)any contract with an individual who is, or would but for an insufficiency of profits or gains be, chargeable to income tax in respect of relevant earnings (as defined in section 623(1) and (2)) from a trade, profession, vocation, office or employment carried on or held by him, being a contract approved by the Board under section 620 or a substituted contract within the meaning of section 622(3);

(b)any contract (including a contract of insurance) entered into for the purposes of, and made with the persons having the management of, an exempt approved scheme as defined in Chapter I of Part XIV, being a contract so framed that the liabilities undertaken by the insurance company under the contract correspond with liabilities against which the contract is intended to secure the scheme;

(c)any contract made under approved personal pension arrangements within the meaning of Chapter IV of Part XIV;

(d)any annuity contract entered into for the purposes of—

(i)a scheme which is approved or is being considered for approval under Chapter I of Part XIV;

(ii)a scheme which is a relevant statutory scheme for the purposes of Chapter I of Part XIV; or

(iii)a fund to which section 608 applies,

being a contract which is made with the persons having the management of the scheme or fund, or those persons and a member of or contributor to the scheme or fund, and by means of which relevant benefits (see subsections (3) and (4) below), and no other benefits, are secured;

(e)any annuity contract which is entered into in substitution for a contract within paragraph (d) above [F2or this paragraph] and by means of which relevant benefits (see subsections (3) and (4) below), and no other benefits, are secured;

[F3(ea)any contract which is entered into, for purposes connected with giving effect to any pension sharing order or provision made in relation to a contract falling within paragraph (d) or (e) above or this paragraph and by means of which relevant benefits (see subsections (3) and (4) below), and no other benefits, are secured;]

(f)any contract with the trustees or other persons having the management of a scheme approved under section 620 or, subject to subsection (5) below, of a superannuation fund which was approved under section 208 of the 1970 Act, being a contract which—

(i)was entered into for the purposes only of that scheme or fund or, in the case of a fund part only of which was approved under section 208, for the purposes only of that part of that fund, and

(ii)(in the case of a contract entered into or varied after 1st August 1956) is so framed that the liabilities undertaken by the insurance company under the contract correspond with liabilities against which the contract is intended to secure the scheme or fund (or the relevant part of the fund).

[F4(2A)For the purposes of subsection (2)(d) above the members of and contributors to a scheme or fund shall be deemed to include any person who by virtue of any pension sharing order or provision (within the meaning of Part XIV) has become entitled to any credit as against the persons having the management of the scheme or fund.]

(3)For the purposes of [F5subsection (2)(d) to (ea)] above “relevant benefits” means relevant benefits as defined by section 612(1) which correspond—

(a)where subsection (2)(d)(i) above applies, or subsection (2)(e) [F6or (ea)] above applies and the contract within subsection (2)(d) was entered into for the purposes of a scheme falling within subsection (2)(d)(i), with benefits that could be provided by a scheme approved under Chapter I of Part XIV;

(b)where subsection (2)(d)(ii) above applies, or subsection (2)(e) [F6or (ea)] above applies and the contract within subsection (2)(d) was entered into for the purposes of a scheme falling within subsection (2)(d)(ii), with benefits that could be provided by a scheme which is a relevant statutory scheme for the purposes of Chapter I of Part XIV;

(c)where subsection (2)(d)(iii) above applies, or subsection (2)(e) [F6or (ea)] above applies and the contract within subsection (2)(d) was entered into for the purposes of a fund falling within subsection (2)(d)(iii), with benefits that could be provided by a fund to which section 608 applies.

(4)For the purposes of subsection (3)(a), (b) or (c) above a hypothetical scheme or fund (rather than any particular scheme or fund), and benefits provided by a scheme or fund directly (rather than by means of an annuity contract), shall be taken.

(5)Subsection (2)(f) above shall not apply to a contract where the fund in question was approved under section 208 of the 1970 Act unless—

(a)immediately before 6th April 1980 premiums paid under the contract with the trustees or other persons having the management of the fund fell within section 323(4) of that Act (premiums referable to pension business); and

(b)the terms on which benefits are payable from the fund have not been altered since that time; and

(c)section 608 applies to the fund.

(6)In subsection (5) above “premium” includes any consideration for an annuity.

Textual Amendments

F5Words in s. 431B(3) substituted (27.7.1999) by Finance Act 1999 (c. 16), Sch. 10 para. 1(4)(a)

Modifications etc. (not altering text)

Valid from 19/07/2007

[F7431BAMeaning of “child trust fund business”U.K.

(1)In this Chapter “child trust fund business” means so much of a company's life assurance business as is referable to child trust fund policies (but not including the reinsurance of such business).

(2)In this section “child trust fund policy” means a policy of life insurance which is an investment under a child trust fund (within the meaning of the Child Trust Funds Act 2004).]

Textual Amendments

F7Ss. 431BA, 431BB inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 8 (with Sch. 7 Pt. 2)

Valid from 19/07/2007

[F7431BBMeaning of “individual savings account business”U.K.

(1)In this Chapter “individual savings account business” means so much of a company's life assurance business as is referable to individual savings account policies (but not including the reinsurance of such business).

(2)In this section “individual savings account policy” means a policy of life insurance which is an investment of a kind specified in regulations made by virtue of section 695(1) of ITTOIA 2005.]

Textual Amendments

F7Ss. 431BA, 431BB inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 8 (with Sch. 7 Pt. 2)

431C Meaning of “life reinsurance business”.U.K.

(1)In this Chapter “life reinsurance business” means reinsurance of life assurance business other than pension business or business of any description excluded from this section by regulations made by the Board.

(2)Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.

431D Meaning of “overseas life assurance business”.U.K.

(1)In this Chapter “overseas life assurance business” means life assurance business, other than pension business [F8, life reinsurance business or business of any description excluded from this section by regulations made by the Board], which—

(a)in the case of life assurance business other than reinsurance business, is business with a policy holder or annuitant not residing in the United Kingdom, and

(b)in the case of reinsurance business, is—

(i)reinsurance of life assurance business with a policy holder or annuitant not residing in the United Kingdom, or

(ii)reinsurance of business within sub-paragraph (i) above or this sub-paragraph.

[F9(2)Regulations under subsection (1) above may describe the excluded business by reference to any circumstances appearing to the Board to be relevant.

(3)The Board may by regulations—

(a)make provision as to the circumstances in which a trustee who is a policy holder or annuitant residing in the United Kingdom is to be treated for the purposes of this section as not so residing; and

(b)provide that nothing in Chapter II of Part XIII shall apply to a policy or contract which constitutes overseas life assurance business by virtue of any such provision as is mentioned in paragraph (a) above.

(4)Regulations under subsection (1) or (3) above may contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.]

Textual Amendments

F8Words in s. 431D(1) substituted (28.7.2000) by Finance Act 2000 (c. 17), s. 108(1) (with s. 108(3))

F9S. 431D(2)-(4) substituted for s. 431D(2)-(8) (28.7.2000) by Finance Act 2000 (c. 17), s. 108(2) (with s. 108(3))

Modifications etc. (not altering text)

431E Overseas life assurance business: regulations.U.K.

(1)The Board may by regulations make provision for giving effect to section 431D.

(2)Such regulations may, in particular—

(a)provide that, in such circumstances as may be prescribed, any prescribed issue as to whether business is or is not overseas life assurance business (or overseas life assurance business of a particular kind) shall be determined by reference to such matters (including the giving of certificates or undertakings, the giving or possession of information or the making of declarations) as may be prescribed,

(b)require companies to obtain certificates, undertakings, information or declarations from policy holders or annuitants, or from trustees or other companies, for the purposes of the regulations,

(c)make provision for dealing with cases where any issue such as is mentioned in paragraph (a) above is (for any reason) wrongly determined, including provision allowing for the imposition of charges to tax (with or without limits on time) on the insurance company concerned or on the policy holders or annuitants concerned,

(d)require companies to supply information and make available books, documents and other records for inspection on behalf of the Board, and

(e)make provision (including provision imposing penalties) for contravention of, or non-compliance with, the regulations.

(3)The regulations may—

(a)make different provision for different cases, and

(b)contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.

Valid from 19/07/2007

[F10431EAMeaning of “gross roll-up business”U.K.

In this Chapter “gross roll-up business” means business of any of the following kinds—

(a)pension business;

(b)child trust fund business;

(c)individual savings account business;

(d)life reinsurance business; and

(e)overseas life assurance business.]

Textual Amendments

F10S. 431EA inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 10 (with Sch. 7 Pt. 2)

431F Meaning of “basic life assurance and general annuity business”.U.K.

In this Chapter “basic life assurance and general annuity business” means life assurance business (including reinsurance business) other than pension business, life reinsurance business or overseas life assurance business.

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