Finance Act 1993

Tax consequences of payments into and out of fund U.K.

[F1 10 (1) In computing for the purposes of income tax the profits of a member’s underwriting business for any year of assessment, the aggregate amount of any payments which, in respect of the [F2 relevant] underwriting year, are made into his special reserve fund under paragraph 3(1) above shall be deducted as an expense. U.K.

(2) In computing for the purposes of income tax the profits of a member’s underwriting business for any year of assessment—

(a) the aggregate amount of any payments which, in respect of the [F2 relevant] underwriting year, are made out of his special reserve fund under paragraph 4(1) or 5(1) above shall be treated as a trading receipt; and

(b) the aggregate amount of any payments which, in respect of that year, are made into that fund under paragraph 4(2) or (3) or 5(4) above shall be deducted as an expense.

(3) In computing for the purposes of income tax the profits of a member’s underwriting business for any year of assessment, the aggregate amount of any payments which, as a result of the repayment of stop-loss payments in the [F2 relevant] underwriting year, are made out of his special reserve fund under paragraph 4(6) or 5(7) above shall be treated as a trading receipt.

(4) In computing for the purposes of income tax the profits of a member’s underwriting business for any year of assessment, the aggregate amount of any payments which, in respect of the [F2 relevant] underwriting year’s closing year, are made out of his special reserve fund under paragraph 6(2) above [F3 (including where they are also made under paragraph 7(1) above)]shall be treated as a trading receipt.

[F4 (5) In this paragraph “the relevant underwriting year”, in relation to a year of assessment, means the underwriting year next but two before its corresponding underwriting year.]]

Textual Amendments

F1 Sch. 20 para. 10 omitted (3.5.1994) (temp. for the years 1994-95, 1995-96 and 1996-97) by virtue of 1994 c. 9, s. 228, Sch. 21 para. 14(3)

F2 Words in Sch. 20 para. 10(1)-(4) substituted (3.5.1994 but without effect for the years 1994-95, 1995-96 and 1996-97) by 1994 c. 9, s. 228, Sch. 21 para. 14(1)(3)

F3 Words in Sch. 20 para. 10(4) substituted (31.12.1999 with effect for the year 2000-01 and subsequent years of assessment and in relation to payments and transfers of assets made on or after 1.1.2000) by S.I. 1999/3308, reg. 5

F4 Sch. 20 para. 10(5) inserted (3.5.1994 but without effect for the years 1994-95, 1995-96 and 1996-97) by 1994 c. 9, s. 228, Sch. 21 para. 14(2)(3)

Modifications etc. (not altering text)

C1 Sch. 20 paras. 10 modified (9.3.1995 with effect for the year 1997-98 and subsequent years of assessment) by S.I. 1995/353, reg. 7(1)(3)(b)