Taxes Consolidation Act 1997 section 713

Investment income reserved for policyholders

Section 713 provides that the tax charge on an assurance company's unrelieved profits attributable to policyholders, under the I–E regime, is at the standard rate of income tax rather than the corporation tax rate.

• The portion of unrelieved profits attributable to policyholders is charged to corporation tax at the standard rate of income tax, or a weighted average of standard rates where the accounting period straddles two tax years.
• Franked investment income (distributions from Irish-resident companies) is apportioned between policyholders and shareholders by reference to the fraction of the company's life business profits excluded from a Case I computation under section 710.
• The standard-rate charge applies only to the lesser of the unrelieved profits and the excess of unrelieved profits plus the shareholders' share of franked investment income over the Case I profits (as reduced by charges, trading losses and group relief).
• Transitional rules in Schedule 32, paragraph 24 require that unrelieved losses carried forward from before 31 December 1992 be scaled back from the former 40 per cent corporation tax rate to the prevailing standard rate of income tax at the time of offset.