Finance Act 2006

Amendment of section 713 (investment income reserved for policyholders) of Principal Act.

54.— (1) Section 713 of the Principal Act is amended in subsection (6) by substituting the following for paragraph (a):

“(a) Where the aggregate of the unrelieved profits and the shareholders’ part of the franked investment income exceeds the profits of the company in respect of its life business for the relevant accounting periods computed in accordance with the provisions of Case I of Schedule D, reduced by the aggregate of the amounts of—

(i) relevant trading charges on income under section 243A,

(ii) a relevant trading loss under section 396A, and

(iii) a loss or excess under section 420A,

to which the company is entitled for the relevant accounting periods, as extended by sections 710 and 714 (whether or not the company is charged to tax under that Case), the part referred to in subsection (3) shall be the lesser of—

(I) the amount of that excess, and

(II) the unrelieved profits,

and”.

(2) This section applies as respects all claims made on or after 2 February 2006.