Explanatory note

Where a friendly society has converted into an insurance company, or has transferred tax exempt life or endowment business or other tax exempt business to such a company, sections 460, 461 and 461B of the Income and Corporation Taxes Act 1988 (c. 1: “ICTA 1988”) provide for the tax exemption to be preserved. These Regulations modify the enactments relating to corporation tax in order to take into account such tax exempt business.

Regulation 1 provides for citation, commencement and effect. The power to make retrospective provision is conferred by sections 460(16), 461(13) and 461B(9) of ICTA 1988.

Regulation 2 defines terms used in the Regulations.

Regulation 3 introduces the modifications of ICTA 1988. Regulations 2 to 12 make technical modifications to the provisions of ICTA 1988.

Regulation 13 modifies section 212 of the Taxation of Chargeable Gains Act 1992 (c. 12).

Regulation 14 modifies paragraph 3A of Schedule 11 to the Finance Act 1996 (c. 8).

Regulation 15 modifies section 255 of the Capital Allowances Act 2001 (c. 2).

These Regulations, together with legislation in FA 2007 (c. 11), are part of the outcome of a continuing consultation process. A draft regulatory impact assessment was included as part of a consultation document, “Life Assurance Company Taxation – A Technical Consultative Document”, which was published by Her Majesty’s Revenue and Customs in May 2006. This is available at www.hmrc.gov.uk/consultations.