The Insurance Companies (Taxation of Reinsurance Business) (Amendment) Regulations 2003

New regulation 13

5.  After regulation 12 add—

“Transfers of reinsurance arrangements effected by novation or insurance business transfer schemes

13.— (1) Where a transfer of a reinsurance arrangement from one insurance company (“the transferor”) to another (“the transferee”) is effected by novation or an insurance business transfer scheme, these Regulations shall apply in relation to the reinsurance arrangement concerned as follows.

(2) Regulation 3 shall not apply.

(3) For the purposes of regulations 4 to 7, an accounting period of the transferor shall be treated as ending with the day of the transfer and a new accounting period of the transferee shall be treated as beginning with that day but—

(a) the new accounting period of the transferee so treated as beginning shall not be treated as the first accounting period during which the reinsurance arrangement concerned is in force; and

(b) the accounting period of the transferor which is so treated as ending shall not treated as the final accounting period during which the reinsurance arrangement concerned is in force.

(4) For the purposes of regulation 5, 6 and 9, the references in regulations 5(1), 6(3) and 9(6) respectively to the cedant company shall be treated as including (as well as the transferee)—

(a) the transferor; and

(b) any insurance company from which the reinsurance arrangement concerned was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.

(5) For the purposes of regulation 5, the reference in paragraph (1) of that regulation to previous accounting periods shall be treated as including (as well as the previous accounting periods of the transferee)—

(a) previous accounting periods of the transferor; and

(b) previous accounting periods of any insurance company from which the reinsurance arrangement concerned was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.

(6) For the purposes of regulation 6, the reference in paragraph (1) of that regulation to the amounts of the investment returns in earlier accounting periods shall be treated as including (as well as the amounts of the investment returns in earlier accounting periods of the transferee)—

(a) the amounts of the investment returns in earlier accounting periods of the transferor; and

(b) the amounts of the investment returns in earlier accounting periods of any insurance company from which the reinsurance arrangement concerned was transferred on an earlier transfer effected by novation or an insurance business transfer scheme.

(7) The following questions shall be determined in respect of the transferor as the cedant company before the transfer and then, as a separate matter, in respect of the transferee as the cedant company after the transfer—

(a) whether the reinsurance arrangement concerned falls within the description prescribed by regulation 9(2);

(b) whether, in relation to the reinsurance arrangement concerned, any of the circumstances set out in regulations 11(a) and 12 exist.

(8) In this regulation, “insurance business transfer scheme” has the meaning given by section 431(2) of the Taxes Act(1).”.

(1)

The reference is to section 431(2) of the Income and Corporation Taxes Act 1988 which was relevantly amended by article 26(3) of S.I. 2001/3629.