|
| |
|
| |
| |
(1) | This section applies if an insurance company has a BLAGAB trade profit for an |
| |
| |
(2) | A comparison must be made between— |
| 5 |
(a) | the I - E profit or excess BLAGAB expenses for the accounting period, |
| |
| |
(b) | the BLAGAB trade profit for the accounting period, |
| |
| adjusted as need be in accordance with sections 94 and 124. |
| |
(3) | In making the calculation required by subsection (2)(a), it is to be assumed that |
| 10 |
this Chapter has effect with the omission of subsection (5)(a) (but, apart from |
| |
that, all the other rules in this Chapter have effect for the purposes of that |
| |
| |
(4) | If there are excess BLAGAB expenses for the accounting period, the amount of |
| |
the excess is treated for the purposes of this section as a negative figure equal |
| 15 |
| |
(5) | If, for the accounting period, the adjusted BLAGAB trade profit exceeds the |
| |
adjusted I - E profit or excess BLAGAB expenses— |
| |
(a) | an amount equal to the difference is an I - E receipt of the company for |
| |
the accounting period (see section 73), and |
| 20 |
(b) | the same amount is carried forward to the company’s next accounting |
| |
period as an expense (see section 76). |
| |
94 | Adjustment of I - E profit or excess BLAGAB expenses |
| |
(1) | This section applies if the BLAGAB trade profit for the accounting period |
| |
includes non-taxable distributions receivable by the company in that period |
| 25 |
that are referable, in accordance with Chapter 7, to the company’s basic life |
| |
assurance and general annuity business. |
| |
(2) | For the purposes of section 93(5) (the comparison of the BLAGAB trade profit |
| |
with the I - E profit or excess BLAGAB expenses), the calculation required by |
| |
section 73 is performed again but adding to the amount of “I” found by step 4 |
| 30 |
the total amount of the non-taxable distributions receivable by the company in |
| |
the accounting period that are so referable. |
| |
(3) | Accordingly, once an adjustment is made in accordance with subsection (2), an |
| |
amount of excess BLAGAB expenses for the accounting period might become |
| |
an adjusted I - E profit for that period. |
| 35 |
(4) | For the purposes of this Part “non-taxable distributions” means distributions |
| |
that are exempt for the purposes of Part 9A of CTA 2009 (company |
| |
| |
(5) | For the purposes of this Part the amount of a non-taxable distribution does not |
| |
include any amount withheld from it on account of tax payable under the laws |
| 40 |
of a territory outside the United Kingdom. |
| |
|
| |
|
| |
|
Non-BLAGAB allowable losses |
| |
95 | Use of non-BLAGAB allowable losses to reduce I - E profit |
| |
(1) | This section applies if— |
| |
(a) | an insurance company has an I - E profit for an accounting period, and |
| |
(b) | non-BLAGAB allowable losses have accrued to the company that are |
| 5 |
available for deduction in accordance with section 210A(2) of TCGA |
| |
1992 from the shareholders’ share of BLAGAB chargeable gains that |
| |
have accrued to the company. |
| |
(2) | Those losses may be deducted from those gains in accordance with that |
| |
provision so as to reduce the amount of the I - E profit for the accounting period |
| 10 |
| |
(3) | For the purposes of subsection (1)(a), assume that non-BLAGAB allowable |
| |
losses cannot be deducted from any BLAGAB chargeable gains (and, |
| |
accordingly, ignore the effect of this section). |
| |
Overseas life insurance companies |
| 15 |
96 | Expenses referable to exempt FOTRA profits |
| |
(1) | This section applies if the profits for an accounting period of the basic life |
| |
assurance and general annuity business carried on by an overseas life |
| |
insurance company in the United Kingdom consist of or include exempt |
| |
| 20 |
(2) | In making the calculation required by step 1 of section 76 for the accounting |
| |
period, ignore so much of the ordinary BLAGAB management expenses of the |
| |
company as are referable to exempt FOTRA profits. |
| |
(3) | The relevant proportion of those expenses is to be regarded for the purposes of |
| |
this section as referable to exempt FOTRA profits. |
| 25 |
(4) | The relevant proportion is—
|
| |
| |
FOTRA is the amount of the exempt FOTRA profits arising in the |
| |
| |
I is the amount of I found by the calculations required by step 4 in section |
| 30 |
73 in relation to the company’s basic life assurance and general annuity |
| |
business for the accounting period. |
| |
(5) | In this section “exempt FOTRA profits” means profits in respect of which no |
| |
liability to corporation tax arises as a result of section 1279 of CTA 2009. |
| |
|
| |
|
| |
|
| |
Apportionment rules for I - E charge |
| |
| |
97 | Application of Chapter |
| |
(1) | This Chapter applies in the case of an insurance company that carries on— |
| 5 |
(a) | basic life assurance and general annuity business, and |
| |
| |
(2) | This Chapter contains rules for determining for the purposes of Chapter 3— |
| |
(a) | the credits or other income, the debits or other losses and the expenses |
| |
that are referable to the company’s basic life assurance and general |
| 10 |
| |
(b) | the chargeable gains and allowable losses accruing on the disposal of |
| |
assets (or parts of assets) that are referable to the company’s basic life |
| |
assurance and general annuity business. |
| |
Allocation of income, losses and expenses |
| 15 |
| |
(1) | This section makes provision for determining— |
| |
(a) | the credits or other income and the debits or other losses arising from |
| |
the company’s long-term business, and |
| |
(b) | the expenses incurred in the course of the company’s long-term |
| 20 |
| |
| that, for the purposes of Chapter 3, are to be regarded as referable to its basic |
| |
life assurance and general annuity business. |
| |
(2) | Those items are to be determined in accordance with an acceptable commercial |
| |
method adopted by the company for the period of account in which the income |
| 25 |
or losses arise or the expenses are incurred. |
| |
(3) | A method is an “acceptable commercial method” if, in all the circumstances, it |
| |
can reasonably be regarded as providing a fair method for the purposes of |
| |
Chapter 3 for determining for a period of account what is referable to the |
| |
company’s basic life assurance and general annuity business. |
| 30 |
(4) | The Treasury may make regulations for the purposes of this section— |
| |
(a) | prescribing cases in which a method is, or is not, to be regarded as an |
| |
acceptable commercial method, and |
| |
(b) | prescribing cases in which the only acceptable commercial method is to |
| |
be a method prescribed, or of a description prescribed, in the |
| 35 |
| |
(5) | Subject to any provision made by regulations under subsection (4), the method |
| |
adopted for the purposes of this section for a period of account— |
| |
(a) | must be consistent with the method adopted for the purposes of section |
| |
| 40 |
(b) | in the case of an overseas life insurance company, must also be |
| |
consistent with the method for that period for attributing assets in |
| |
|
| |
|
| |
|
accordance with the provision made by or under Chapter 4 of Part 2 of |
| |
CTA 2009 to its permanent establishment in the United Kingdom. |
| |
(6) | In this section “debits or other losses” means— |
| |
(a) | losses in any separate UK property business carried on by the company |
| |
which is within section 86(4), |
| 5 |
(b) | losses in any separate overseas business carried on by the company |
| |
which is within section 86(4), |
| |
(c) | debits in respect of any loan relationships of the company, |
| |
(d) | debits in respect of any derivative contracts of the company, |
| |
(e) | debits brought into account by the company under Part 8 of CTA 2009 |
| 10 |
(intangible fixed assets), and |
| |
(f) | losses of the company which arise from miscellaneous transactions (as |
| |
defined by section 89(4)). |
| |
Allocation of chargeable gains and allowable losses on disposals of assets |
| |
99 | Application of sections 100 and 101 |
| 15 |
(1) | Sections 100 and 101 apply for determining the chargeable gains or allowable |
| |
losses that, for the purposes of Chapter 3, are to be regarded as referable to a |
| |
company’s basic life assurance and general annuity business whenever it |
| |
disposes of assets held for the purposes of its long-term business (including |
| |
cases where, as a result of Chapter 8 or any other provision of the Corporation |
| 20 |
Tax Acts, it is deemed to make a disposal). |
| |
(2) | Expressions that are used in sections 100 and 101 and in TCGA 1992 have the |
| |
same meaning in those sections as they have for the purposes of that Act. |
| |
100 | Assets wholly or partly matched to BLAGAB liabilities |
| |
(1) | If, immediately before the disposal, the whole of the asset was matched to a |
| 25 |
BLAGAB liability, the whole of the gain or loss is referable to the company’s |
| |
basic life assurance and general annuity business. |
| |
(2) | If, immediately before the disposal, a part of the asset was matched to a |
| |
BLAGAB liability, the appropriate portion of the gain or loss is referable to the |
| |
company’s basic life assurance and general annuity business. |
| 30 |
(3) | “The appropriate proportion” means the proportion equal to the proportion of |
| |
the asset matched to the BLAGAB liability. |
| |
(4) | If, as a result of Chapter 8, there is a disposal of a part of an asset where the part |
| |
concerned is matched to a BLAGAB liability, the whole of the gain or loss is |
| |
referable to the company’s basic life assurance and general annuity business. |
| 35 |
(5) | The concept of the whole or a part of an asset being matched to a BLAGAB |
| |
liability is explained by section 138. |
| |
101 | Commercial allocation for disposals not wholly dealt with by section 100 |
| |
(1) | This section applies if, in the case of the disposal— |
| |
(a) | no part of the gain or loss is dealt with by section 100, or |
| 40 |
(b) | section 100 deals with only a proportion of the gain or loss. |
| |
|
| |
|
| |
|
(2) | The gain or loss, or (as the case may be) the remaining proportion of the gain |
| |
or loss, which is referable to the company’s basic life assurance and general |
| |
annuity business is determined in accordance with an acceptable commercial |
| |
method adopted by the company for the period of account in which the |
| |
| 5 |
(3) | A method is an “acceptable commercial method” if it secures that gains or |
| |
losses are referable to the company’s basic life assurance and general annuity |
| |
business in a way that fairly represents the contribution that the assets in |
| |
question have made to that business during the period in which they have been |
| |
held for the purposes of the company’s long-term business. |
| 10 |
(4) | The Treasury may make regulations for the purposes of this section— |
| |
(a) | prescribing cases in which a method is, or is not, to be regarded as an |
| |
acceptable commercial method, and |
| |
(b) | prescribing cases in which the only acceptable commercial method is to |
| |
be a method prescribed, or of a description prescribed, in the |
| 15 |
| |
(5) | Subject to any provision made by regulations under subsection (4), the method |
| |
adopted for the purposes of this section for a period of account— |
| |
(a) | must be consistent with the method adopted for the purposes of section |
| |
98 for that period and the method adopted for the purposes of section |
| 20 |
| |
(b) | in the case of an overseas life insurance company, must also be |
| |
consistent with the method for that period for attributing assets in |
| |
accordance with the provision made by or under Chapter 4 of Part 2 of |
| |
CTA 2009 to its permanent establishment in the United Kingdom. |
| 25 |
| |
I - E profit: policyholders’ rate of tax |
| |
Tax rate on policyholders’ share of I - E profit |
| |
102 | Policyholders’ rate of tax on policyholders’ share of I - E profit |
| |
(1) | This section applies if an insurance company has an I - E profit for an |
| 30 |
| |
(2) | The rate of corporation tax chargeable for a financial year on the policyholders’ |
| |
share (if any) of the I - E profit is the policyholders’ rate of tax. |
| |
(3) | The policyholders’ rate of tax is the rate at which income tax at the basic rate is |
| |
charged for the tax year that begins on 6 April in the financial year. |
| 35 |
(4) | The policyholders’ share of the I - E profit is determined in accordance with |
| |
| |
(5) | The policyholders’ share of the I - E profit for an insurance company’s |
| |
accounting period is to be left out of account in determining for the purposes |
| |
of Part 3 of CTA 2010 (companies with small profits)— |
| 40 |
(a) | the augmented profits of the company for the accounting period, and |
| |
(b) | the taxable total profits of the company for the accounting period. |
| |
|
| |
|