Finance Act, 2001

Amendment of section 594 (foreign life assurance and deferred annuities: taxation and returns) of Principal Act.

66.—(1) Section 594 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the deletion in paragraph (c)(ii) of “, on or after the 20th day of May, 1993”,

(ii) by the insertion after paragraph (c)(ii) of the following subparagraphs:

“(iii) Subsection (2) shall apply as if section 573(2)(b) had not been enacted.

(iv) For the purposes of subsection (2)—

(I) there shall be a disposal of or of an interest in the rights of a policy of assurance, where benefits are payable under the policy, and

(II) where at any time, a policy of assurance, or an interest therein, gives rise to benefits in respect of death or disability, either on or before maturity of the policy, the amount or value of such benefits which shall be taken into account for the purposes of determining the amount of a gain under that subsection shall be the excess of the value of the policy or, as the case may be, the interest therein, immediately before that time, over the value of the policy or, as the case may be, the interest therein, immediately after that time.

(v) For the purposes of subparagraph (iv), the value of a policy or of an interest therein at any time means—

(I) in the case of a policy which has a surrender value, the surrender value of the policy or, as the case may be, of the interest therein, at that time, and,

(II) in the case of a policy which does not have a surrender value, the market value of the rights or other benefits conferred by the policy or, as the case may be, the interest therein, at that time.”,

and

(iii) by the insertion after paragraph (f) of the following:

“(g) Where a policy was issued or a contract made before 20 May 1993, only so much of the gain on disposal as accrued on or after 20 March 2001 shall be a chargeable gain.”,

(b) by the deletion of subsection (3), and

(c) in subsection (4) by the substitution for paragraph (a) of the following:

“(a) in this subsection, ‘reinsurance contract’ means any contract or other agreement for reassurance or reinsurance in respect of—

(i) any policy of assurance on the life of any person, or

(ii) any class of such policies, not being new basis business within the meaning of section 730A.”.

(2) (a) In this section “chargeable period” has the same meaning as in section 321(2).

(b) This section—

(i) as respects paragraph (a), shall apply as on and from 20 March 2001,

(ii) as respects paragraph (b), shall apply in respect of any chargeable period commencing on or after 15 February 2001, and

(iii) as respects paragraph (c), shall be deemed to have applied as on and from 1 January 2001.