Explanatory note
(This note is not part of the Regulations)
Section 463 of the Income and Corporation Taxes Act 1988 (“the Taxes Act”) provides that the Corporation Tax Acts shall apply to the life and endowment business carried on by friendly societies in the same way as they apply to mutual life assurance business or other long term business carried on by insurance companies, subject to such modifications and exceptions as may be prescribed by regulations made by the Treasury. The Friendly Societies (Modification of the Corporation Tax Acts) Regulations 1997 (S.I. 1997/473) (“the principal Regulations”) make provision for such modifications and exceptions. These Regulations amend the principal Regulations with retrospective effect as described below.
Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.
Regulation 3 inserts regulations 13A and 13B in the principal Regulations which modify sections 432AA and 432AB of the Taxes Act (Schedule A business or overseas property business) with effect from 1st April 1998.
Regulation 4 inserts regulation 30B in the principal Regulations which modifies section 755A of the Taxes Act (treatment of chargeable profits and creditable tax apportioned to company carrying on life assurance business) in relation to accounting periods ending on or after 1st July 1999.
Regulation 5 corrects a drafting error in regulation 53 of the principal Regulations, with effect in relation to accounting periods ending on or after 1st April 1996.
Regulation 6 inserts regulation 53ZA in the principal Regulations which modifies Schedule 11 to the Finance Act 1996 (loan relationships—special provisions for insurers) as that Schedule is modified in relation to companies carrying on capital redemption business by the Insurance Companies (Capital Redemption Business) (Modification of the Corporation Tax Acts) Regulations 1999 (S.I. 1999/498). The modifications made by regulation 6 have effect in relation to accounting periods of friendly societies ending on or after 1st July 1999.
Regulation 7 inserts regulation 53B in the principal Regulations which modifies paragraph 4 of Schedule 6 to the Finance Act 1999 (tax treatment of receipts by way of reverse premiums received on or after 9th March 1999).
Authority for the retrospective effect of these Regulations is given by section 463(4) of the Taxes Act.