Finance Act 2007

45 Tax exempt business of friendly societies

(1) Section 462 of ICTA (conditions for tax exempt business) is amended as follows.

(2) For subsection (1) substitute—

“(1) Subject to subsections (2) to (4) below, section 460 does not afford any exemption from corporation tax in relation to so much of the profits arising to a friendly society or insurance company from any business as is attributable to a policy which—

(a) is not a qualifying policy (by virtue of sub-paragraph (2) of paragraph 6 of Schedule 15) and is not an excluded policy, and

(b) would not be a qualifying policy (by virtue of that sub-paragraph) if all excluded policies were left out of account.

(1A) For the purposes of subsection (1) above a policy is an excluded policy if—

(a) it is a policy held otherwise than with the friendly society or insurance company, or

(b) the person who has the contract effecting the policy acquired the rights under it on an assignment (or, in Scotland, assignation) otherwise than for money or money’s worth.”

(3) In subsection (2), for “under section 460(1) for profits arising from any part of a life or endowment” substitute “in relation to profits arising from any part of a”.

(4) In subsection (3), for the words after “section” substitute “460 does not afford any exemption from corporation tax in relation to so much as is attributable to that policy of the profits of the friendly society or insurance company concerned.”

(5) In section 462A(8)(b) of ICTA (election to tax exempt business), for ““societies”” substitute ““policies””.

(6) The amendments made by this section are deemed to have come into force on 1st January 2007.