Finance Act 2012

Definitions of expressions comprising “I”

74 Meaning of “income”

(1) In section 73 “income”, in relation to an insurance company, means the following income or credits so far as arising from the company’s long-term business—

(a) income of the company chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of any separate UK property business or overseas property business within section 86(4),

(b) credits in respect of any loan relationships of the company,

(c) credits in respect of any derivative contracts of the company,

(d) credits brought into account by the company under Part 8 of CTA 2009 (intangible fixed assets),

(e) income of the company chargeable under Part 9A of CTA 2009 (company distributions),

(f) income of the company chargeable under Chapter 5 of Part 10 of CTA 2009 (distributions from unauthorised unit trusts),

(g) income of the company chargeable under Chapter 6 of Part 10 of CTA 2009 (sale of foreign dividend coupons),

(h) income of the company chargeable under Chapter 7 of Part 10 of CTA 2009 (annual payments not otherwise charged),

(i) income of the company arising from a source outside the United Kingdom which is chargeable under Chapter 8 of Part 10 of CTA 2009 (income not otherwise charged), and

(j) income of the company chargeable under any provision to which section 1173 of CTA 2010 (miscellaneous charges) applies other than section 752 of CTA 2009 (non-trading gains on intangible fixed assets).

(2) The reference in subsection (1)(a) to income chargeable under Chapter 3 of Part 4 of CTA 2009 includes income chargeable under that Chapter in respect of distributions treated by section 548(5) of CTA 2010 as profits of a UK property business carried on by the company.

(3) References in subsection (1)(b) to (d) to credits need to be read with section 88(3) and (4).

(4) The reference in subsection (1)(j) to income chargeable as mentioned there needs to be read with section 89(1).

(5) For the purposes of this section references to income or credits that are chargeable or brought into account under any provision are to income or credits that, but for sections 68 and 69, would be chargeable or brought into account under that provision.

(6) For the purposes of this section no account is to be taken of income which arises from an asset forming part of the long-term business fixed capital of the company (see section 137).

75 Meaning of “BLAGAB chargeable gains” etc

(1) This section explains for the purposes of section 73 how to calculate the BLAGAB chargeable gains of the company for the accounting period as adjusted for allowable losses.

• Step 1

  First, calculate the chargeable gains—

  (a)

  that accrue to the company in the accounting period from the disposal of assets held for the purposes of the company’s long-term business, and

  (b)

  that are referable, in accordance with Chapter 4, to its basic life assurance and general annuity business.

• Step 2

  Then, deduct from the amount of those gains—

  (a)

  any allowable losses that accrue to the company in the accounting period from the disposal of assets held for the purposes of the company’s long-term business and that are so referable, and

  (b)

  so far as not previously deducted from any chargeable gains, any allowable losses that accrued to the company in a previous accounting period from the disposal of assets held for the purposes of the company’s long-term business and that were so referable.

  The resulting amount is the amount of the BLAGAB chargeable gains of the company for the accounting period as adjusted for allowable losses.

(2) The deduction at step 2 may reduce an amount to nil but no further.

(3) For the purposes of this section no account is to be taken of a chargeable gain or allowable loss accruing to the company on a disposal for the purposes of TCGA 1992 of an asset that forms part of the long-term business fixed capital of the company.

(4) References in this section to chargeable gains or allowable losses are references to those gains or losses as calculated in accordance with the rules contained in TCGA 1992.