Clause 129 - Intra-group transfers and demutualisation

Finance Bill – in a Public Bill Committee at 11:15 am on 19th June 2012.

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Amendments made: 137, in clause 129, page 78, line 19, at end insert—

‘(5A) But if there is a difference between—

(a) the net amount recognised by the transferee in respect of the transfer of contracts of long-term insurance or contracts made in the course of capital redemption business, and

(b) the net amount recognised by the transferor in respect of the transfer of those contracts,

the amount of the difference is to be taken into account for the purpose of calculating the BLAGAB trade profit or loss of the transferee for the accounting period in which those contracts are transferred.

(5B) The difference is to be taken into account—

(a) as a receipt (if, when added to the net amount in subsection (5A)(b), the result is the net amount in subsection (5A)(a)), and

(b) as an expense (if, when subtracted from the net amount in subsection (5A)(b), the result is the net amount in subsection (5A)(a)).

(5C) The net amount recognised by an insurance company in respect of the transfer of the contracts is determined by subtracting—

(a) the total amount in respect of liabilities relating to the contracts that is or would be recognised for the purposes of a balance sheet drawn up at the relevant time by the company in accordance with generally accepted accounting practice, from

(b) the total amount in respect of assets relating to the contracts that is or would be recognised for those purposes,

and “the relevant time” means the time immediately before the transfer (in the case of the transferor) and the time immediately after it (in the case of the transferee).

(5D) The Treasury may by order amend any of subsections (5A) to (5C).’.

Amendment 138, in clause 129, page 78, line 19, at end insert—

‘(5E) This section does not apply to any amount that arises in respect of a transfer so far as the transfer consists of a with-profits fund transfer.

The reference here to a with-profits fund transfer is a reference to—

(a) a transfer of business from a with-profits fund to a fund that is not a with-profits fund, or

(b) a transfer of business from a fund that is not a with-profits fund to a with-profits fund.’.— (Mr Hoban.)

Clause 129, as amended, ordered to stand part of the Bill.