Finance Act 2007

Income and Corporation Taxes Act 1988 (c. 1)

6 (1) Section 431 (interpretative provisions relating to insurance companies) is amended as follows.

(2) In subsection (2), insert at the appropriate places—

““child trust fund business” has the meaning given by section 431BA;”,

““foreign currency assets”, in relation to an insurance company and any time during a period of account, means assets, other than assets linked to gross roll-up business, which—

(a) are at that time managed under the control of a person whose normal place of work is at a permanent establishment outside the United Kingdom at or through which the company carries on gross roll-up business; or

(b) are denominated in a foreign currency and specified in a certificate given by a director of the company no later than three months after the end of the period of account as being all of the assets of the company’s long-term insurance fund which are held at that time during the period of account to enable the company to meet liabilities of its gross roll-up business which are denominated in that currency;”,

““gross roll-up business” has the meaning given by section 431EA;”,

““immediate needs annuities business” means business which consists of the effecting or carrying out of immediate needs annuities (within the meaning of section 725 of ITTOIA 2005);”,

““individual savings account business” has the meaning given by section 431BB;”, and

““PHI business” means long-term business other than life assurance business (including the reinsurance of such long-term business);”.

(3) In subsection (2), omit the definitions of—

(a) “annuity business”, and

(b) “overseas life assurance fund”.

(4) In subsection (2), for the definition of “life assurance business” substitute—

““life assurance business” means business which—

(a) consists of the effecting or carrying out of contracts of insurance which fall within paragraph I, II, III or VII(b) of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, or

(b) is capital redemption business,

other than immediate needs annuities business;”.

(5) In subsection (2), for the definition of “reinsurance business” substitute—

““reinsurance” includes retrocession;”.

(6) After subsection (2ZE) insert—

“(2ZF) In this Chapter “capital redemption business” means any business of a company carrying on insurance business in so far as it consists of the effecting on the basis of actuarial calculations, and the carrying out, of contracts under which, in return for one or more fixed payments, a sum or series of sums of a specified amount become payable at a future time or over a period.”