(1) The Principal Act is amended in Chapter 1 of Part 26 -

(a) by the substitution in section 711 for subsection (1) of the following:

"(1) For the purposes of computing corporation tax on chargeable gains accruing to a fund or funds maintained by an assurance company in respect of its life business -

(a)

(i) section 556, and

(ii) section 607,

shall not apply,

(b) section 581 shall, as respects -

(i) subsections (1) and (2) of that section, and

(ii) subsection (3) of that section, in so far as a chargeable gain is not thereby disregarded for the purposes of that subsection,

apply as if paragraph 24 of Schedule 32, section 719, section 723(7) (a) and paragraph (a) (ii) had not been enacted,

(c) the amount of capital gains tax computed for the purposes of section 78(2), otherwise than in respect of the special investment fund, is the amount so computed as if, notwithstanding section 28(3), the rate of capital gains tax were -

(i) throughout the financial year 1999, subject to paragraph (d), 40 per cent, and

(ii) throughout each subsequent financial year, the rate of corporation tax specified in section 21(1) for that financial year,

and