{
  "url": "https://openlegislation.uk/insurance-companies-corporation-tax-acts-amendment-order-2007/note",
  "json_url": "https://openlegislation.uk/insurance-companies-corporation-tax-acts-amendment-order-2007/note.json",
  "legislation": "uksi/2007/1031",
  "legislation_title": "The Insurance Companies (Corporation Tax Acts) (Amendment) Order 2007",
  "legislation_url": "https://openlegislation.uk/insurance-companies-corporation-tax-acts-amendment-order-2007",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This note is not part of the Order)\nThis Order amends the Income and Corporation Taxes Act 1988 (c. 1: “ICTA”), the Finance Act 1989 (c. 26: “FA 89”), the Finance Act 1991 (c. 31: “FA 91”) and the Capital Allowances Act 2001 (c. 2: “CAA 01”). The amendments are in consequence of changes of rules in the Prudential Sourcebook for Insurers made by the Financial Services Authority (“the FSA”) under the Financial Services and Markets Act 2000 (c. 8).\nThe amendments made by articles 3 and 10 to 13 of this Order adjust the additional amounts to be brought into account in computing an insurance company’s closing liabilities (in the case of life assurance business) and long term business provision (in the case of long-term business which is not life assurance business). Those additional amounts are then brought back into account as trading receipts of the insurance company in subsequent periods of account.\nThe changes of rules made by the FSA result also in the possibilities of elements of an insurer’s mathematical reserves (i.e. its liabilities to policy holders in respect of their policies) being negative and of those reserves being reduced to nil, thus producing inappropriate tax results. The other amendments made by this Order correct that by treating any negative elements as nil and, in addition, providing for a just and reasonable apportionment in appropriate cases.\nThe amendments have effect for periods of account ending on or after 31st December 2006. Authority for the retrospective provision made by this Order is contained in section 431A(2) of ICTA.\nArticle 1 provides for the citation, commencement and effect of the Order.\nArticle 2 introduces the amendments to ICTA contained in articles 3 to 9.\nArticle 3 amends section 432YA of ICTA so as to adjust the additional amounts to be brought into account in computing an insurance company’s provision in respect of long-term business which is not life assurance business and to provide for the bringing back into account of those amounts as trading receipts of the company in subsequent periods of account. It also repeals subsection (4) of section 432YA which is not needed in relation to long-term business which is not life assurance business.\nArticle 4 amends section 432A of that Act (apportionment of income and gains).\nArticle 5 amends section 432C of that Act (section 432B apportionment: income of non-participating funds).\nArticle 6 amends section 432D of that Act (section 432B apportionment: value of non-participating funds).\nArticle 7 amends section 432E of that Act (section 432B apportionment: participating funds).\nArticle 8 amends section 432G of that Act (section 432B: apportionment of business transfer-in).\nArticle 9 amends paragraph 4 of Schedule 19AA to that Act (overseas life assurance fund: determination of the amount of fund).\nArticle 10 introduces the amendments to FA 89 contained in articles 11 to 13.\nArticle 11 amends section 82 of that Act so as to reflect the insertion of new sections 82E and 82F by article 13 and to make other minor amendments.\nArticle 12 amends section 82D of that Act so as to adjust the additional amounts to be brought into account in computing an insurance company’s provision in respect of life assurance business and to provide for the bringing back into account of those amounts as trading receipts of the company in subsequent periods of account.\nArticle 13 inserts new sections 82E and 82F into that Act. These new sections alter the effect of section 82D (and also section 432YA of ICTA) where an insurance business transfer scheme has effect to transfer long-term business. Section 82E deals with the treatment of the transferor and section 82F with the treatment of the transferee.\nArticle 14 amends Schedule 7 to FA 91 (basic life assurance and general annuity business), in particular the transitional provisions contained in paragraphs 16 and 17 of that Schedule.\nArticle 15 amends section 255 of CAA 01 (life assurance business: apportionment of allowances and charges).\nA full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/2007/1031/note",
    "retrieved_at": "2026-10-29T03:56:16.615047+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}