Annex 1: Minor changes in the law made by the Act: Change 114: Individual investment plans: non-resident insurance companies: sections 697 and 698(6)
This change extends the provisions in section 333A of ICTA to cover non-resident insurance companies and omits section 333B(4) of ICTA (so far as income tax is concerned).
Sections 333 to 333B of ICTA contain powers for the Treasury to make regulations providing for the income of individuals from investments held in certain types of investment plan to be exempt from income tax. Section 333A of ICTA provides that the regulations may include certain requirements to be fulfilled by a “European institution” or a “relevant authorised person” if it is to be a “plan manager”.
Section 333B(4) of ICTA provides for regulations to be made about non-resident insurance companies appointing United Kingdom tax representatives. So far as income tax is concerned, this provision does much the same for non-resident insurance companies as section 333A of ICTA does for European institutions. This duplication is unnecessary: it was never intended that non-resident insurance companies should be subject to substantially different requirements from European institutions. Indeed, some non-resident insurance companies may be European institutions, which increases the scope for confusion.
So, in rewriting these provisions, section 333A of ICTA has been extended to cover non-resident insurance companies and section 333B(4) of ICTA has been omitted, so far as income tax is concerned. Section 697(2)(c) provides that “foreign institution” includes “…an insurance company which is non-UK resident”.
This has four effects.
	The provisions rewritten from section 333A of ICTA will apply only to non-resident insurance companies which are plan managers, whereas section 333B(4) of ICTA applies for all non-resident insurance companies.
	The more specific language of section 333A of ICTA is substituted for the general formula in section 333B(4)(a) of ICTA, see sections 697 and 698.
	The scope of the provision is restricted to the “prescribed duties” (rewritten as “specified” duties, see section 697(1)) referred to in section 333A(2), (3) and (4), whereas section 333B(4) of ICTA applies to any duties.
	The powers which may be conferred and the liabilities which may be imposed are restricted to those covered by section 333A(10) of ICTA, rather than those covered by section 333B(4)(b) of ICTA (see section 698(6)).
This change has no implications for the amount of tax paid, who pays it or when.