Overview
1891.Part 12 contains provisions which do not fit naturally into other Parts. These are:
particular provisions for life assurance business (Chapter 1);
general provisions about additional VAT liabilities and repayments under the capital goods scheme (Chapter 2);
definitions about oil and oil licences and related matters (Chapter 3);
provisions for partnerships, successions and transfers (Chapter 4);
provisions for apportionments of proceeds from sales (for example) and other miscellaneous matters (Chapter 5); and
final provisions for the Act (Chapter 6).
Chapter 1: Life assurance business
Overview
1892.This Chapter makes provisions for companies carrying on life assurance business:
section 544 defines “management asset” and provides that there are no capital allowances on them other than plant and machinery allowances; and
section 544 defines “investment asset” and provides for capital allowances on them to be apportioned between categories of business.
Section 544: Management assets
1893.This section is based on section 434D(1), (2) and (7) of ICTA. It defines “management asset” and restricts the availability of allowances for management assets.
1894.Subsection (4) ensures that “expenses of management within section 76 of ICTA” is given the intended meaning by disregarding section 76(1)(d). See Note 69 in Annex 2.
Section 545: Investment assets
1895.This section is based on section 434E(1), (4) and (5) of ICTA. It defines “investment asset” and sets out rules for the allocation and availability of allowances for investment assets.
1896.Subsections (1) and (2) define “investment asset” as any asset held by a company carrying on any life assurance business other than a management asset. This is a change to the definition in section 434E(1), since there is no reference here to property businesses. See Change 61 in Annex 1.
1897.Subsection (3) requires any allowances in respect of investment assets to be apportioned between the categories of insurance business in the same way that income relating to the asset would be apportioned.
1898.Subsection (4) provides that capital allowances on investment assets are not available if the life assurance business is charged to tax under Case I of Schedule D, so that allowances are only available if the company is charged to tax on the I-E basis.
1899.Subsection (5) provides that capital allowances on investment assets are not taken into account in calculating the profits of the company’s pension business, life reinsurance business or overseas life assurance business. So, allowances on investment assets are only available in calculating the profits from the company’s BLAGAB.
Chapter 2: Additional VAT liabilities and rebates: interpretation, etc.
Overview
1900.This Chapter provides the interpretation for the provisions in Parts 2, 3 and 6 dealing with additional VAT liabilities and rebates. It is based on section 159A of CAA 1990.
1901.These provisions apply if taxpayers are required to make adjustments under the VAT capital items legislation (commonly known as the capital goods scheme) which is dealt with in regulations 112 to 116 of VAT Regulations 1995 (SI 1995/2518)).
