Capital Allowances Act 2001

Chapter 1 Life assurance business

544 Management assets

(1) No allowances are to be given or charges imposed in respect of management assets of any life assurance business carried on by a company except under Part 2 (plant and machinery allowances).

(2) An asset is a management asset of any life assurance business carried on by a company if it is provided for use, or used, for the management of that business of that company.

(3) The management of any life assurance business consists of pursuing those purposes expenditure on which would, on the assumption below, be treated as expenses of management under section 75 of ICTA as applied by 76 of ICTA.

(4) The assumption is that section 76(1)(d) (exclusion from expenses of management of expenses referable to pension business, ISA business, life reinsurance business and overseas life assurance business) is disregarded.

(5) In this Act “life assurance business” has the meaning given by section 431(2) of ICTA.

545 Investment assets

(1) This section applies if a company which is carrying on any life assurance business holds an asset for purposes other than the management of that business.

(2) “Investment asset” means an asset that is within subsection (1).

(3) If the company is carrying on more than one category of life assurance business, any allowance under this Act in respect of an investment asset must be apportioned between the categories in the same way that income from the asset would, under section 432A of ICTA, be treated as referable to different categories of business in the case of an insurance company.

(4) If the company is charged to tax in respect of its life assurance business under Case I of Schedule D, no allowance in respect of an investment asset is to be taken into account in calculating the company’s profits from that business.

(5) If the company is charged to tax under—

(a) section 436 of ICTA (pension business and ISA business),

(b) section 439B of ICTA (life reinsurance business), or

(c) section 441 of ICTA (overseas life assurance business),

no allowance in respect of an investment asset is to be taken into account in calculating the company’s profits from the category of life assurance business in question.