729 Income tax, foreign tax and tax credit

Summary

This section deals with the treatment of foreign tax and tax credits in relation to an overseas life assurance company.

Details

(1) In computing the investment income of the life assurance fund or the profits of the annuity business, of an overseas life assurance company a deduction is not made in respect of foreign tax suffered.

(2) The set off (against corporation tax liability) of income tax deducted from payments received by an overseas life assurance company is restricted.

(3) The income tax which may be set off against corporation tax chargeable in respect of investment income of the company’s ordinary life business is restricted to an amount of income tax at the standard rate on the proportion of investment income chargeable to corporation tax in accordance with section 726.

(4) Where a company is chargeable to corporation tax in accordance with section 727 on a proportion of its total profits arising from general annuity business, the income tax available for set off against corporation tax on those profits is restricted to an amount of income tax at the standard rate on the proportion of income from investments included in computing those profits.

(6) In relation to gains on the disposal of investments held in connection with the life business of an overseas life assurance company any foreign tax suffered is not allowed as a deduction in computing chargeable gains under section 726(6).

Relevant Date: Finance Act 2021