Chapter 4: Special provision for life assurance business
Section 1159: Limitation on relief under Chapter 2
2970.This section provides that the deductions allowed in Chapter 2 do not apply to the calculation of the profits of a company’s life assurance business where the calculation is made in accordance with the provisions of Part 3 (trading income). It is based on paragraph 20 of Schedule 22 to FA 2001.
Section 1160: Provision in respect of I minus E basis
2971.This section provides that the provisions of this Chapter apply where the profits of an insurance company are charged to tax under the I minus E basis in respect of its life assurance business. It is based on paragraph 21 to Schedule 22 to FA 2001.
Section 1161: Relief in respect of I minus E basis: enhanced expenses payable
2972.This section sets out the three conditions that companies with life assurance business must satisfy in order to claim relief for expenditure on the remediation of contaminated land. It also sets out the relief that is available (subsection (6)). It is based on paragraphs 22 and 23 of Schedule 22 to FA 2001.
2973.The relief takes the form of an enhancement in the expenses payable which the company may bring into account at Step 1 of section 76(7) of ICTA.
Section 1162: Meaning of “qualifying Chapter 4 expenditure”
2974.This section defines a company’s “qualifying Chapter 4 expenditure” as the amount of its qualifying land remediation expenditure reduced by any amount not attributable to basic life assurance and general annuity business (BLAGAB). It is based on paragraph 22 of Schedule 22 to FA 2001.
2975.Qualifying Chapter 4 expenditure may include expenditure of a capital nature.
Section 1163: No relief if company responsible for contamination
2976.This section denies relief if the company or a person connected with it was responsible for any part of the contamination. It is the life assurance company equivalent of section 1150. It is based on paragraph 22 of Schedule 22 to FA 2001.
Section 1164: Entitlement to tax credit
2977.This section allows a company to claim a life assurance company tax credit if it has a “qualifying life assurance business loss”. It is the life assurance company equivalent of section 1151 and is based on paragraph 24 of Schedule 22 to FA 2001.
Section 1165: Meaning of “qualifying life assurance business loss”
2978.This section defines “qualifying life assurance business loss”. It is the life assurance company equivalent of section 1152. It is based on paragraph 24 of Schedule 22 to FA 2001.
Section 1166: Amount of tax credit
2979.This section gives the amount of the cash payment the company carrying on life assurance business will receive. It is the life assurance company equivalent of section 1154 and is based on paragraph 25 of Schedule 22 to FA 2001.
Section 1167: Payment of tax credit etc
2980.This section applies various provisions contained in Chapter 3 (namely sections 1151(4), 1155, 1156 and 1157) with appropriate modifications for companies carrying on life assurance business. Those provisions include provision relating to the payment of a life assurance company tax credit. It is based on paragraphs 26 and 28 of Schedule 22 to FA 2001.
Section 1168: Restriction on carrying forward expenses payable where tax credit claimed
2981.This section ensures that the amount of any qualifying life assurance business loss that is surrendered in return for the payment of a life assurance company tax credit is not available for carry forward. It is the life assurance company equivalent of section 1158. It is based on paragraph 27 of Schedule 22 to FA 2001.