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22. (1) The policy holders' share of the franked investment income from investments held in connection with a company’s life assurance business–
(a)shall not be used (for the purposes of computing the amount of shadow ACT which the company is treated as having paid for an accounting period under regulation 11(10)) to frank relevant distributions made by the company in that period;
(b)shall be disregarded in determining whether the company has a surplus of franked investment income as mentioned in regulation 11(13), or the amount of the surplus.
(2) For the purposes of regulations 12 to 14, the profits charged to corporation tax for any accounting period of a company carrying on life assurance business shall be reduced by deducting the policy holders' share of the relevant profits.
(3) In this regulation–
“life assurance business” shall be construed in accordance with section 431(2);
“policy holders' share of the franked investment income” shall be construed in accordance with section 434(6A)(a)(1);
“policy holders' share of the relevant profits” shall be construed in accordance with section 89 of the Finance Act 1989(2).
Subsection (6A) of section 434 was inserted by section 45(7) of the Finance Act 1990 (c. 29).
Section 89 was substituted by section 45(3) of the Finance Act 1990, and the substituted section was amended by paragraph 9 of Schedule 16 to the Finance Act 1994, paragraph 26(3) of Schedule 6 to the Finance Act 1996, and paragraph 14 of Schedule 3, paragraph 19 of Schedule 6 and Part II(6) and (11) of Schedule 8 to the Finance (No. 2) Act 1997.
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