Explanatory note

Section 156 of the Income and Corporation Taxes Act 1988 (c. 1: “ICTA 1988”) provides that the enactments relating to corporation tax have effect in relation to overseas life insurance companies subject to such modifications and exceptions as may be prescribed by the Treasury.

These Regulations amend the regulations making such modifications, the Overseas Life Insurance Companies Regulations 2006 (S.I. 2006/3271: “the principal Regulations”). In particular, the Regulations take into account a number of changes made to the life assurance tax provisions by the Finance Act 2007 (c. 11: “FA 2007”). The Regulations also make other amendments to the principal Regulations, in particular to cater for overseas life insurance companies which are EEA firms or Treaty firms and which follow international accounting standards (“IAS”) (with the result that they are not required to produce the IAD accounts referred to in the principal Regulations).

Regulation 1 provides for citation, commencement and effect. The power to make retrospective provision is conferred by section 156(4) of the Finance Act 2003.

Regulation 2 introduces the amendments to the principal Regulations. The remaining regulations amend the principal Regulations so as to make technical modifications to the enactments relating to corporation tax.

Regulations 3 to 13 amend regulations of the principal Regulations which modify provisions of ICTA 1988.

Regulations 14 to 18 amend regulations of the principal Regulations which modify provisions of the Finance Act 1989 (c. 26).

Regulation 19 omits a regulation of the principal Regulations which modifies provisions of the Finance (No. 2) Act 1992 (c. 48).

Regulation 20 amends a regulation of the principal Regulations which modifies a provision of the Finance Act 1996 (c. 8).

Regulation 21 omits a regulation of the principal Regulations which modifies a provision of the Capital Allowances Act 2001 (c. 2).

Regulations 22 to 24 amend regulations of the principal Regulations which modify provisions of the Finance Act 2002 (c. 23).

These Regulations, together with the relevant legislation in FA 2007, 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.