(1)This section applies in relation to the computation in accordance with the provisions of Case I of Schedule D of the profits of the insurance business, other than life assurance business, of—
(a)an insurance company,
(b)a corporate member of Lloyd's, or
(c)a controlled foreign company.
(2)For periods of account to which this section applies nothing in—
(a)section 70 of the Taxes Act 1988 (assessment to corporation tax on full amount of profits, etc), or
(b)section 42 of the Finance Act 1998 (c. 36) (computation of profits to be on basis giving true and fair view),
prevents the company from computing the profits of that business on a realisation basis rather than a mark to market basis.
A “realisation basis” means not recognising a profit or loss on an asset until it is realised, and a “mark to market basis” means bringing assets into account in each period of account at a fair value.
(3)Subject to subsection (4), this section applies in relation to any period of account that—
(a)began before 1st August 2001, and
(b)ends before 31st July 2002.
(4)This section does not apply if—
(a)an earlier period of account beginning on or after 1st January 2001 ended with an accounting date different from that with which the previous period of account ended,
(b)the change of accounting date was notified—
(i)to the registrar of companies, or
(ii)in the case of a company established under the law of a country or territory outside the United Kingdom, to the corresponding authority of that country or territory,
on or after 17th April 2002, and
(c)the purpose, or one of the purposes, for which the change was made was so that a subsequent period of account would be one to which section 64 above applies (computation of profits: adjustment on change of basis).
(5)In this section—
“controlled foreign company” has the same meaning as in Chapter 4 of Part 17 of the Taxes Act 1988; and
“corporate member of Lloyd's” means a corporate member as defined in section 230(1) of the Finance Act 1994 (c. 9).