Mr Howard Flight (Shadow Chief Secretary To the Treasury, Economic Affairs; Arundel & South Downs, Conservative)

I, too, welcome you to the Chair, Sir John. We are pleased that the Government have introduced the amendments to deal with some relatively minor outstanding issues that needed to be dealt with. The industry is broadly content with the arrangements in clause 47 and schedule 7, and there is nothing to criticise.

Amendment agreed to.

Amendments made: No. 87, in

schedule 7, page 282, line 32, at end insert—

'(7) Where an amount is shown as post-transfer reduction liabilities in the transferor's accounts for any accounting period beginning after the transfer, this section applies as if the amount of the retained liabilities at the end of that accounting period (and the beginning of the next) were increased by the amount so shown.

(8) In subsection (7) above ''post-transfer reduction liabilities'' means liabilities of the transferor to make payments to relevant persons which, in accordance with the terms of the insurance business transfer scheme, have arisen in consequence of a reduction in the amount of the retained liabilities at any time after the transfer.

(9) In subsection (8) above ''relevant persons'' means—

(a) if the transferor's life assurance business immediately before the transfer was mutual business, persons who were policy holders or annuitants, or members of the transferor, at that time, and

(b) in any other case, persons who were policy holders or annuitants at that time.''.'.

No. 88, in

schedule 7, page 285, line 13, at end insert—

'(1A) In the following provisions of the Finance Act 1989 (c.26) (which relate to the policy holders' share of profits)—

(a) section 88(3A)(a),

(b) the words within quotation marks in the portion of section 88(3B) preceding paragraph (a),

(c) the portion of section 89(1B) preceding paragraph (a), and

(d) section 89(2)(b),

after ''referable'' insert ''(in accordance with section 432A of the Taxes Act 1988)''; and, in consequence of the amendment made by paragraph (b), in section 88(3B), for ''referable to that business'' substitute ''so referable''.'.—[Ruth Kelly.]

Schedule 7, as amended, agreed to.

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