Finance Act, 1993

Life assurance companies: transitional provisions.

12.—(1) For the purposes of computing the liability of an assurance company to corporation tax in respect of its life business, where an accounting period of the company begins before the 1st day of January, 1993, and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on the 31st day of December, 1992, and the other beginning on the 1st day of January, 1993, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company.

(2) (a) Notwithstanding section 11 and subject to paragraph (b), sections 46A and 46B (inserted by the Finance Act, 1992 , and as amended by section 11 ) of the Corporation Tax Act, 1976 , shall also apply as respects an assurance company's accounting period ending on the 31st day of December, 1992:

Provided that, in computing the chargeable gain on a disposal which is deemed to have been made by virtue of this paragraph—

(i) subsection (1) of section 3 of the Capital Gains Tax (Amendment) Act, 1978 , shall apply as if, in subsection (3) of that section, paragraph (b) were deleted, and

(ii) if the disposal would not have been deemed to have been made apart from this paragraph, the said section 46A shall apply to that disposal as if the proviso to subsection (3) were deleted.

(b) Notwithstanding section 36 (as amended by section 11 ) of the Corporation Tax Act, 1976 , where chargeable gains and allowable losses accrue on disposals, deemed by virtue of the said section 46A, as applied by paragraph (a), to have been made by a life assurance company, the amount of any fraction of the difference between the aggregate of such chargeable gains and the aggregate of such allowable losses which is treated by virtue of the said section 46B as a chargeable gain of an accounting period ending on or after the 1st day of January, 1993, shall be deducted from the amount of the unrelieved profits (within the meaning of the said section 36) of the accounting period for the purposes of computing the relief due to the company under the said section 36.