(1) Chapter 5 of Part 26 of the Principal Act is amended -
(a) by substituting the following for section 730D(2) (b) (iii):
"(iii) a person who -
(I) is exempt from income tax under Schedule D by virtue of section 207(1)(b), or
(II) is exempt from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6), and",
(b) by inserting the following after section 730D(2):
(a) In this subsection -
'EEA Agreement' means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;
'EEA state' means a State, other than the State, which is a Contracting Party to the EEA Agreement;
'offshore state' means a State, other than the State, which is -
(a) a Member State of the European Communities, or
(b) a State which is an EEA state.
(b) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where -
(i) the as
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