(1) (a) Where an insurer carries on off-shore insurance business in conjunction with other insurance businesses, the part of the chargeable income for a year of assessment which is attributable to that off-shore insurance business shall consist of an amount which bears the same proportion to the chargeable income for that year of assessment of the insurer as the part of the aggregate income which relates to the off-shore insurance business bears to the whole of the aggregate income for that year of assessment from all sources of the insurer; and
(b) the amount arrived at under paragraph (a) shall be treated as the chargeable income for a year of assessment of an insurer from offshore insurance business for the purposes of paragraph 3 of Part I of Schedule 1.
(2) As soon as any amount of chargeable income from the off-shore insurance business of an insurer (being a company) resident for the basis year for a year of assessment has been subject to income tax at the rate of five per cent-
(a) the net amount of that income (after deduction of such tax) shall be credited to an account (that account and company being referred to as the exempt account and the relevant company respectively); and
(b) paragraph 5 (except subparagraph (1) thereof) and paragraph 6 of Schedule 7A shall apply as if any reference in those paragraphs to any income exempted or which has become exempt under paragraph 3 were a reference to income credited to the exempt account.
