Taxes Consolidation Act 1997 section 717

Pension business

Section 717 provides rules for computing the profits of an assurance company's pension business, including a corporation tax exemption for pension fund investment income and an election to disapply that exemption in certain circumstances.

• Income and chargeable gains from investments of a life assurance company's life fund and separate annuity fund attributable to pension business are exempt from corporation tax, including income from financial futures and traded options quoted on any futures or stock exchange.
• The exemption does not prevent such income and gains being taken into account in computing profits or losses for other corporation tax purposes, and franked investment income is included when computing pension business profits under section 715.
• Where franked investment income in a period does not exceed pension business profits, the company may elect that the pension fund investment income exemption and the inclusion of franked investment income in the section 715 computation shall not apply; the election must be made in writing within two years of the end of the accounting period or within a longer period allowed by the Revenue Commissioners.
• When computing pension business profits under section 715, annuities referable to pension business are deductible, but such annuities may not be treated as paid out of profits or gains brought into charge to income tax.