Finance Act, 1995
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Amendment of section 20A (foreign life assurance and deferred annuities: taxation and returns) of Capital Gains Tax Act, 1975. |
68.—Section 20A (inserted by the Finance Act, 1993 ) of the Capital Gains Tax Act, 1975 , is hereby amended, as respects disposals of assets on or after the 20th day of May, 1993, by the addition of the following subsection: | |
“(4) (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. | ||
(b) Where apart from this paragraph a reinsurance contract would not be a policy of assurance on the life of any person for the purposes of this Act it shall be deemed to be such a policy for those purposes. | ||
(c) Subsections (2) and (3) shall not apply to, and shall be deemed never to have applied to, reinsurance contracts: | ||
Provided that where, apart from this paragraph, a reinsurance contract would not be a relevant policy within the meaning of section 20B (inserted by the Finance Act, 1994 ) for the purposes of that section, it shall be deemed not to be such a policy for those purposes. | ||
(d) (i) Subject to paragraph (e), where, apart from paragraph (c) of this subsection, subsection (2) would apply to a reinsurance contract in respect of any policy of assurance on the life of any person, being a policy issued on or after the 1st day of January, 1995, section 20 (2) shall not have effect in respect of any disposal or deemed disposal on or after the 1st day of January, 1995, of, or any interest in, rights of the insured company under the reinsurance contract to the extent that— | ||
(I) those rights refer to the said policy, and | ||
(II) the insured company could receive, otherwise than on the death, disablement or disease of any person, or one of a class of persons, to whom the said policy refers, payment on a disposal of those rights the aggregate amount of which would exceed the aggregate amount of payment made by it in respect of those rights: | ||
Provided that this subparagraph shall apply— | ||
(A) as respects any reinsurance contract made before the 20th day of May, 1993, as if that contract were made on that day, and | ||
(B) as respects any reinsurance contract made or modified on or after the 1st day of January, 1995, as if there were deleted from this subparagraph ‘being a policy issued on or after the 1st day of January, 1995,’. | ||
(ii) Subparagraphs (i) and (ii) of subsection (1) (b) shall apply for the purposes of this paragraph as if for ‘the 20th day of May, 1993’ there were substituted ‘the 1st day of January, 1995’. | ||
(e) Paragraph (d) shall not apply to any disposal of, or any interest in, rights under a reinsurance contract, being a disposal resulting directly from the death, disablement or disease of a person, or one of a class of persons, to whom the reinsurance contract refers: | ||
Provided that in computing any gain or loss in respect of a disposal or deemed disposal of, or any interest in, rights of the insured company under a reinsurance contract— | ||
(i) there shall be excluded from the sums allowable under paragraph 3 of Schedule 1 to the Capital Gains Tax Act, 1975 , so much of any payment made by the insured company under the reinsurance contract as is paid in respect of an entitlement to a payment on the death, disablement, or disease of a person, or one of a class of persons, and | ||
(ii) there shall be added to the consideration taken into account under the said Schedule the market value of an entitlement for any period, commencing on or after the most recent acquisition or deemed acquisition by the insured company of the said rights, to a payment on the death, disablement or disease of a person, or one of a class of persons, to the extent that the insured company held the entitlement for that period in place of any return which would otherwise have accrued under the reinsurance contract and increased the said consideration.”. |