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6 1967

INCOME TAX ACT, 1967

PART X

Special Provisions as to Assurance Companies and Investment Businesses

Relief for expenses of management.

214. —(1) Where an assurance company carrying on life assurance business, or any company whose business consists mainly in the making of investments, and the principal part of whose income is derived therefrom, or any savings bank or other bank for savings, claims and proves to the satisfaction of the Special Commissioners that, for any year of assessment, it has been charged to tax by deduction or otherwise, and has not been charged in respect of its profits in accordance with the provisions of this Act applicable to Case I of Schedule D, the company or bank shall be entitled to repayment of so much of the tax paid by it as is equal to the amount of the tax on any sums disbursed as expenses of management (including commissions) for that year:

Provided that—

(a) relief shall not be given under this section so as to make the tax paid by the company or bank less than the tax which would have been paid if the profits had been charged in accordance with the provisions of this Act applicable to Case I of Schedule D; and

(b) the amount of any fines, fees, or profits arising from reversions in the case of an assurance company, and, in the case of any other company or any such bank, the amount of any income or profits derived from sources not charged to tax, shall be deducted from the amount treated as expenses of management for the year; and

(c) in calculating profits arising from reversions, the company may set off against those profits any loss arising from reversions for any previous year during which any enactment granting this relief was in operation.

(2) Notice of any claim to the Special Commissioners under this section, together with the particulars thereof, shall be given in writing to the inspector within twelve months after the expiration of the year of assessment in respect of which the claim is made, and where the inspector objects to such claim the Special Commissioners shall hear and determine the same in like manner as in the case of an appeal to them against an assessment under Schedule D, and the provisions of this Act relating to the statement of a case for the opinion of the High Court on a point of law shall apply.

(3) A company or bank shall not be entitled to any relief under this section in respect of any expenses as to which relief may be claimed or allowed under section 23 or 24.

(4) Where an assurance company, not having its head office in the State, is charged under Case III of Schedule D, on a proportion of the income from the investments of its life assurance fund, or on a basis substituted therefor, the relief in respect of expenses of management shall be calculated by reference to a like proportion of its total expenses of management for the year, estimated according to the provisions of this Act.

(5) Where income arising from the investments of the foreign life assurance fund of an assurance company has been relieved from tax in pursuance of the provisions of this Act, a corresponding reduction shall be made in the relief granted under this section in respect of the expenses of management.

Foreign assurance companies: investment income.

215. —(1) Where an assurance company not having its head office in the State carries on life assurance business through any branch or agency in the State, any income of the company from the investments of its life assurance fund (excluding the annuity fund, if any), wherever received, shall, to the extent provided in this section, be deemed to be profits comprised in Schedule D and shall be charged under Case III thereof.

(2) Such portion only of the income from the investments of the life assurance fund for the year preceding the year of assessment shall be so charged as bears the same proportion to the total income from those investments as the amount of premiums received in that year from policy holders resident in the State and from policy holders resident outside the State whose proposals were made to the company at or through its office or agency in the State bears to the total amount of the premiums received by the company:

Provided that in the case of an assurance company having its head office in Northern Ireland, Great Britain or in any other country to which the repealed enactments corresponding to this section would apply but for their repeal, the Revenue Commissioners may, by regulation, substitute some basis other than that herein prescribed for the purpose of ascertaining the portion of the income from investments to be so charged as being income derived from business carried on in the State.

(3) Where a company has already been charged to tax, by deduction or otherwise, in respect of its life assurance business, to an amount equal to or exceeding the charge under this section, no further charge shall be made under this section, and where a company has already been so charged, but to a less amount, the charge shall be proportionately reduced.

Companies carrying on life assurance business.

216. —(1) Where an assurance company carries on life assurance business in conjunction with assurance business of any other class, the life assurance business of the company shall for the purposes of this Act be treated as a separate business from any other class of business carried on by the company.

(2) In ascertaining whether an assurance company has sustained a loss in respect of its life assurance business for the purpose of setting off such loss against the profits of any other business carried on by the company, or for the purpose of obtaining repayment of tax under section 307, any income of the company derived from the investments of its life assurance fund shall be treated as part of the profits of the company acquired in that business.

Liability of assurance companies.

217. —(1) Where the profits of an assurance company in respect of its life assurance business are, for the purposes of this Act, computed in accordance with the provisions thereof applicable to Case I of Schedule D, then, subject to subsection (3), the following provisions shall have effect:—

(a) such part of those profits as belongs or is allocated to, or is expended on behalf of, policy-holders or annuitants shall be excluded in making the computation;

(b) such part of those profits as is reserved for policy-holders or annuitants shall also be excluded in making the computation, but if any profits so excluded as being so reserved cease at any time to be so reserved and are not allocated to, or expended on behalf of, policy-holders or annuitants, then those profits shall be treated as profits of the company for the year in which they ceased to be so reserved.

(2) Where an assurance company carries on both ordinary life assurance business and industrial life assurance business, then, subject to subsection (3), the business of each such class shall, for the purposes of this Act, be treated as though it were a separate business and section 214 shall apply separately to each such class of business.

(3) Neither subsection (1) nor subsection (2) shall apply to an assurance company in respect of any year of assessment unless the company elects, by giving notice in writing to the inspector within twelve months after the end of that year, that the said subsections (1) and (2) shall both apply to it in respect of that year.