The Insurance Companies (Overseas Life Assurance Business) (Compliance) (Amendment) Regulations 2007

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Insurance Companies (Overseas Life Assurance Business) (Compliance) Regulations 1995 (S.I. 1995/3237) (“the principal Regulations”). The principal Regulations make provision for the purposes of giving effect to section 431D of the Income and Corporation Taxes Act 1988 (c. 1) in relation to the meaning of “overseas life assurance business”.

Regulation 1 provides for citation, commencement and effect. Authority for the retrospective effect of the amendments is given by paragraph 58 of Schedule 8 to the Finance Act 1995 (c. 4).

Regulation 2 introduces the amendments to the principal Regulations. The amendments take account of changes made by the Finance Act 2007 (c. 11: “FA 2007”) and update the principal Regulations in other respects.

Regulation 3 amends regulation 2 (interpretation) to take account of amendments made by FA 2007.

Regulation 4 inserts a new regulation 3B (exclusion of business of friendly society which is exempt from tax) to exclude the tax exempt life assurance business of an insurance company from the principal Regulations. This regulation takes account of amendments made by FA 2007.

Regulation 5 amends regulation 4 (business which is overseas life assurance business: general) and is consequent upon the amendment made by regulation 7 of these Regulations.

Regulation 6 amends regulations 5, 7, 7A and 8 so as to replace references to a “branch” of an insurance company with references to a “permanent establishment” to take account of amendments made by the Finance Act 2003 (c. 14: “FA 2003”).

Regulation 7 omits regulations 9, 10, 10A and 11 to take account of amendments made by FA 2007 to the definition of overseas life assurance business.

Regulation 8 amends regulation 12 (territories in which policy holders residing: general) and is consequent upon the amendment made by regulation 10 of these Regulations.

Regulation 9 amends regulations 13, 14 and 14A so as to replace references to a “branch” of an insurance company with references to a “permanent establishment” to take account of amendments made by FA 2003.

Regulation 10 omits regulations 15, 16 and 16A to take account of amendments made by FA 2007 to the definition of overseas life assurance business.

Regulation 11 amends regulation 18 (reclassification of policy or contract from date when it was effected) to take account of amendments made by FA 2007 and to make minor corrections.

Regulation 12 amends regulation 19 (reclassification of policy or contract from date after it was effected) to take account of amendments made by FA 2007 and to make minor corrections.

These Regulations, together with the relevant legislation in FA 2007, are part of the outcome of a continuing consultation process. A draft regulatory impact assessment was included as part of a consultation document, “Life Assurance Company Taxation – A Technical Consultative Document”, which was published by Her Majesty’s Revenue and Customs in May 2006. This is available at www.hmrc.gov.uk/consultations.