# The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2005, Note: Explanatory note


(This note is not part of the Order)
This Order amends Chapter 1 of Part 12 of the Income and Corporation Taxes Act 1988 (c. 1: “ICTA”) and other provisions of the Corporation Tax Acts relating to companies carrying on carrying on life assurance business, primarily to amend the apportionment rules in section 432A ICTA to ensure that income and gains of such a company’s inherited estate are not attributed to any category of business where the income and gains would be exempt from tax.
Article 1 of the Order provides for its citation, commencement and effect.
Article 2 introduces the amendments to Chapter 1 of Part 12 (“Chapter 1”) of ICTA.
Article 3 amends section 431, which contains interpretative provisions for the purposes of Chapter 1, in consequence of amendments made by the later provisions of the Order.
Article 4 makes an amendment to section 432ZA to clarify the effect of references in that section to linked assets, where only part of the value of an asset is identified in an insurance company’s records for the purpose of determining the amounts of benefits which are expressed to be linked to the value of that part.
Article 5 amends section 432A to provide for separate treatment for basic life assurance and general annuity business (“BLAGAB”) on the one hand and other categories of business on the other, and makes other changes which are consequent upon the separate treatment of BLAGAB.
Article 6 amends section 432B (apportionment of receipts brought into account) to make new provision for the adjustment of amounts computed under section 83 of the Finance Act 1989 in respect of shareholder’s excess income and gains.
Article 7 makes amendments to Schedule 19AA to ICTA (which forms part of Chapter 1) as a consequence of the introduction of the concept of the free asset amount.
Article 8 makes an amendment to section 88 of the Finance Act 1989, removing provisions which are unnecessary in consequence of the changes made by the earlier provisions of this Order.
Article 9 makes an amendment to Schedule 11 to the Finance Act 1996 which is consequent upon the amendments to section 432A in respect of the computation of the relevant fraction of the insurance company’s business for the purposes of attributing income and gains to particular funds.
Article 10 contains consequential repeals.
This Order does not impose new costs on business.

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Source: https://www.legislation.gov.uk/uksi/2005/3465/note (the official version)
Page: https://openlegislation.uk/insurance-companies-corporation-tax-acts-amendment-order-2005/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.