Special provisions relating to insurance companies
36(1)Nothing in this Schedule shall be read as preventing profits and gains arising from intangible fixed assets of an insurance company from being included, where—
(a)the assets are referable to life assurance business carried on by the company, and
(b)the I minus E basis is applied in relation to that business,
in profits and gains on which the company is chargeable to tax in accordance with that basis.
(2)Where for any accounting period the I minus E basis is applied in relation to life assurance business carried on by an insurance company, the effect of applying that basis is that credits or debits falling to be brought into account under this Schedule in respect of intangible fixed assets of the company referable to that business—
(a)are not brought into account as mentioned in paragraph 31 (assets held for purposes of trade), but
(b)subject to the following provisions of this paragraph, are instead brought into account under paragraph 34 as non-trading credits or, as the case may be, non-trading debits.
(3)Where an insurance company carries on basic life assurance and general annuity business—
(a)a separate computation of the credits and debits referable to that business shall be made under paragraph 34 (non-trading credits and debits),
(b)any resulting non-trading gain in respect of intangible assets is chargeable to tax as mentioned in sub-paragraph (4) of that paragraph, and
(c)any resulting non-trading loss in respect of intangible assets is treated as additional expenses of management within section 76 of the Taxes Act 1988.
(4)References in any enactment to the computation of any profits of an insurance company in accordance with the provisions of the Taxes Act 1988 applicable to Case I of Schedule D have effect as if those provisions included the provisions of this Schedule, but only to the extent that they relate to the bringing into account of debits in respect of royalties.
(5)Where an insurance company carries on life assurance business or any category of life assurance business—
(a)the credits and debits under this Schedule referable to that business or category of business, other than debits in respect of royalties, shall be disregarded for the purposes of any computations falling to be made in relation to that business or category of business in accordance with the provisions applicable to Case I of Schedule D, and
(b)accordingly, the amounts to be brought into account in any such computations shall be determined under the provisions applicable apart from this Schedule.
(6)In this paragraph “the I minus E basis” means the basis commonly so called under which a company carrying on life assurance business is charged to tax on that business otherwise than under Case I of Schedule D.