(1) Subject to subsection (2), where a company carries on any business of mutual trading or mutual insurance or other mutual business, the provisions of the Corporation Tax Acts and of Schedule F relating to distributions shall apply to distributions made by the company, notwithstanding that they are made to persons participating in the mutual activities of that business and derive from those activities, but shall so apply only to the extent to which the distributions are made out of profits of the company which are brought into charge to corporation tax or out of franked investment income.
(2) In the case of a company carrying on any mutual life assurance business, the provisions of the Corporation Tax Acts and of Schedule F relating to distributions shall not apply to distributions made to persons participating in the mutual activities of that business and derived from those activities; but, if the business includes annuity business, the annuities payable in the course of that busine
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