716 General annuity business

Summary

This section deals with the treatment of annuities paid which are referable to general annuity business.

Details

(1) Taxed income of an annuity fund is its income charged to corporation tax (otherwise than under Case IV of Schedule D in accordance with section 715) together with its franked investment income.

(2) Annuities paid by a company carrying on general annuity business, in so far as they are referable to that business, are treated as charges on income to the extent that they do not exceed the part of the annuity fund referable to that business.

(3) Such charges can be set off against profits of a life assurance company’s general annuity business only and not against the total profits of the company.

(4) In computing the profits arising from general annuity business chargeable to tax under Case IV of Schedule D —

• taxed income is excluded,
• annuities treated as charges and deductible under subsection (2) may not be deducted, and
• annuities not so treated may be deducted.

(5) A non-resident company carrying on general annuity business through a branch or agency in the State may not treat any part of the annuities paid which are referable to that business as paid out of profits or gains brought into charge to income tax.

Relevant Date: Finance Act 2021