Article 4 Amendment of Part 2 of Schedule 26 to the Finance Act 2002

Amend paragraph 4 as follows.

Omit sub-paragraph (1A).

For sub-paragraph (2) substitute—

“(2)

For the purposes of this paragraph the excluded types of property are—

(a)

in relation to an option or future, intangible fixed assets; and

(b)

in relation to relevant contracts which satisfy the conditions specified in sub-paragraph (2A) or (2B)—

(i)

shares in a company, or

(ii)

rights of a unit holder under a unit trust scheme.

(2A)

The conditions specified in this sub-paragraph are—

(a)

the relevant contract is entered into by a company carrying on life assurance business;

(b)

the relevant contract is an approved derivative for the purposes of Rule 4.3.5 of the Integrated Prudential Sourcebook; and

(c)

there is a hedging relationship between the relevant contract and shares or rights of a unit holder under a unit trust scheme held by the company as assets of its long-term insurance fund.

(2B)

The conditions specified in this sub-paragraph are—

(a)

the relevant contract is entered into or acquired by a company otherwise than for the purposes of a trade carried on by it or the company is a mutual trading company, and

(b)

there is a hedging relationship between the contract and an asset of the company which consists of shares or rights of a unit holder under a unit trust scheme.”.

Omit sub-paragraphs (3) and (5).