Corporation Tax Citation, commencement and effect 1 1 These Regulations may be cited as the Overseas Life Insurance Companies (Amendment) Regulations 2008 and shall come into force on 12th August 2008. 2 Regulations 3, 4 and 7 to 17 have effect in relation to periods of account beginning on or after 1st January 2008 which end on or after the day on which these Regulations come into force. 3 But regulations 7 , 9, 10 and 12 have effect only in relation to transfers of business taking place on or after 1st July 2008. Amendments to the Overseas Life Insurance Companies Regulations 2006 2 The Overseas Life Insurance Companies Regulations 2006 are amended as follows. Amendment of regulation 5 3 In regulation 5(3) (modifications of section 76(7) of the Income and Corporation Taxes Act 1988)— a in sub-paragraph (a), for “(b)” substitute “(c)”, and b in sub-paragraph (b), the inserted paragraph (d) becomes inserted paragraph (e). Amendment of regulation 6 4 1 Regulation 6 (modifications of section 431(2) of the Income and Corporation Taxes Act 1988) is amended as follows. 2 In paragraph (1), omit “(2)”. 3 After paragraph (1) insert— 1ZA Modify subsection (2) in accordance with paragraphs (1A) to (5). . 4 For paragraph (1A) substitute— 1A In the definition of “foreign business assets” omit— a “either”, b “or” at the end of paragraph (a), and c paragraph (b). . 5 After paragraph (2) insert— 2A In the case of an EEA firm or a Treaty firm, for the definition of “liabilities” substitute— “liabilities”, where the company concerned is an EEA firm or a Treaty firm— does not include liabilities that have been reinsured, but subject to that, means liabilities (including those which arise from deposit back arrangements) as determined in accordance with actuarial principles for the purposes of any return equivalent to a periodical return and required to be made by the company under the law of the territory in which the company is resident; . . 6 In paragraph (4)— a omit the substituted definition of “liabilities”, and b in the substituted definition of “insurance business transfer scheme”, for “or 4” substitute “, 4 or 5”. 7 In paragraph (5), in the inserted definition of “free assets amount”— a for “aggregate of the relevant liabilities and the amount of the shareholders’ excess assets” substitute “relevant liabilities”, b insert “and” at the end of paragraph (a), and c omit paragraph (c) and the “and” before it. 8 After paragraph (5) insert— 6 In subsection (2YC) , at the end insert— so far as that income and those gains fall to be attributed, for the purposes of section 11AA(2) , to the permanent establishment in the United Kingdom through which the company carries on life assurance business. . 7 In subsection (2YD), at the end insert— so far as those amounts and that deduction fall to be attributed, for the purposes of section 11AA(2), to the permanent establishment in the United Kingdom through which the company carries on life assurance business. . . Amendment of regulation 8 5 In regulation 8 (modifications of section 432A of the Income and Corporation Taxes Act 1988) , omit paragraph (2). Amendment of regulation 9 6 In regulation 9 (modifications of section 432B of the Income and Corporation Taxes Act 1988) , omit paragraph (3). Insertion of regulations 14ZA to 14ZC 7 After regulation 14 (modification of section 442A of the Income and Corporation Taxes Act 1988) insert— 14ZA In section 444AA (transfers of business: deemed periodical returns) , in subsection (5), in a case where the transferor is an EEA firm or a Treaty firm, for paragraphs (a) and (b) substitute— a in respect of the amount of the relevant long-term business provisions immediately before the transfer, and b in respect of the value, immediately before the transfer, of the assets transferred. . 14ZB In section 444ABA (relevant non-transferred assets) , in subsection (1), in a case where the transferor is an EEA firm or a Treaty firm, for the definition of BTO substitute— BTO is the lesser of VA and APL, where— VA is the value of the assets transferred by the insurance business transfer scheme shown (or treated as shown) in the periodical return of the transferor for the period of account of the transferor including the transfer date, and APL is the amount of the profit or loss for the financial year shown in the balance sheet in the periodical return for the last period of account of the transferor ending before the transfer date, together with— in the case of IAD accounts, the amount of profit or loss shown as being brought forward in that balance sheet, and in the case of IAS accounts, the amount of retained earnings shown as being brought forward in that balance sheet. . 14ZC 1 In a case where the transferor is an EEA or a Treaty firm, modify section 444ABB (retained assets) as follows. 2 In subsection (1)— a for “RL13” (in both places) substitute “RL”; and b in the definition of RL13, for “AL13” substitute “APL”. 3 In subsection (1A) for paragraphs (a) to (c) substitute— a APL is the amount of the profit or loss for the financial year shown in the balance sheet in the periodical return for the last period of account of the transferor ending before the transfer date, together with— i in the case of IAD accounts, the amount of profit or loss shown as brought forward in that balance sheet, and ii in the case of IAS accounts, the amount of retained earnings shown as brought forward in that balance sheet; b VE is the amount (if any) by which VA exceeds VTL where— i VA is the value of the assets transferred by the insurance business transfer scheme shown (or treated as shown) in the periodical return of the transferor for the period of account of the transferor including the transfer date, and ii VTL is the value of the liabilities transferred by the insurance business transfer scheme (but excluding those which arise from deposit back arrangements); and c relevant retained liabilities are any liabilities of the company’s long-term business which are owed by the company immediately after the transfer date and are shown (or treated as shown) as entries— i at items C3 (net of reinsurance) and G in IAD accounts, or ii at equivalent items in the balance sheet in IAS accounts. . . Substitution of regulation 14A 8 For regulation 14A (modification of section 444ABD of the Income and Corporation Taxes Act 1988) substitute— 14A 1 In a case where the transferor is an EEA firm or a Treaty firm, modify section 444ABD (transferor’s period of account including transfer) as follows. 2 In subsection (1), for paragraphs (a) and (b) substitute— a the value of the liabilities transferred by the insurance business transfer scheme (but excluding those which arise from deposit back arrangements), exceeds b the value, immediately before the transfer, of the assets transferred by the insurance business transfer scheme, . 3 In subsection (1E) for “amount” (in the first place) substitute “value”. . Substitution of regulation 15 9 For regulation 15 (modifications of section 444AC of the Income and Corporation Taxes Act 1988) substitute— 15 1 In a case where the transferor is an EEA firm or a Treaty firm, modify section 444AC (transfer schemes: reduction of income of transferee) as follows. 2 In subsection (4) for the words from “lesser of” to the end substitute— the amount of the profit or loss for the financial year shown in the balance sheet in the periodical return for the last period of account of the transferor ending before the transfer date, together with— a in the case of IAD accounts, the amount of profit or loss shown as being brought forward in that balance sheet, and b in the case of IAS accounts, the amount of retained earnings shown as being brought forward in that balance sheet. . 3 Omit subsection (5). . Omission of regulation 15A 10 Omit regulation 15A (modification of section 444AD of the Income and Corporation Taxes Act 1988) . Insertion of regulation 15B 11 Before regulation 16 (modification of section 444AL of the Income and Corporation Taxes Act 1988) insert— 15B In a case where the transferor or the transferee is an EEA firm or a Treaty firm (or both are), omit section 444AE (transfers of business: FAFTS) . . Insertion of regulation 15C 12 After regulation 15B (inserted by regulation 11) insert— 15C In section 444AEA (transfer schemes: anti-avoidance rule) , in subsection (6), in the definition of “surplus-increasing transfer of assets”, in a case where the transferor is an EEA firm or a Treaty firm, for “increases the amount of total surplus shown in line 39 of Form 58” substitute “gives rise to an amount that increases the profits or reduces the losses shown”. . Amendment of regulation 22 13 In regulation 22 (modifications of section 83 of the Finance Act 1989), after paragraph (2) insert— 2A In subsection (2A), in the case of an EEA firm or a Treaty firm, omit paragraph (ac) . . Insertion of regulation 22B 14 After regulation 22A (modification of section 83XA of the Finance Act 1989) insert— 22B In the case of an EEA firm or a Treaty firm, omit sections 83YC to 83YF (financing-arrangement-funded transfers) . . Omission of regulation 23 15 Omit regulation 23 (modification of section 83ZA of the Finance Act 1989). Omission of regulation 25 16 Omit regulation 25 (modification of section 88(3) of the Finance Act 1989). Amendment of regulation 26 17 In regulation 26 (modifications of section 89 of the Finance Act 1989), omit paragraph (2). Claire Ward Dave Watts Two of the Lords Commissioners of Her Majesty’s Treasury 22nd July 2008