Taxes Consolidation Act 1997 section 716

General annuity business

Section 716 deals with the treatment of annuities paid by a company which are referable to its general annuity business, including how such annuities interact with taxed income and the restrictions on setting them off against profits.

• "Taxed income" of an annuity fund means income charged to corporation tax (other than under section 715) together with franked investment income; annuities referable to general annuity business are treated as charges on income to the extent they do not exceed the taxed income of the relevant part of the annuity fund.
• Annuities treated as charges may only be set off against profits arising in that accounting period from the company's general annuity business — they cannot be offset against the company's total profits or against the profits of any other company.
• When computing profits from general annuity business under section 715, taxed income is excluded, annuities treated as charges are not deductible, but annuities not so treated may be deducted.
• A non-resident company carrying on general annuity business through a branch or agency in the State may not treat any part of its annuities referable to that business as paid out of profits or gains brought into charge to income tax.