Corporation Tax Act 2009

Determination of questions requiring apportionments U.K.

393 General rules for some debtor relationships U.K.

(1) This section applies if a debtor relationship of an insurance company is represented by a liability which is a liability of its long-term insurance fund.

(2) Any question arising for the purposes of the Corporation Tax Acts as to how far any credits or debits given for the purposes of this Part in respect of the liability are referable to any particular category of the company's long-term business is determined as follows.

(3) In the case of credits and debits within the rules in section 394, that section applies.

(4) In the case of other credits and debits, the relevant fraction of the credits or debits is referable to a category of long-term business.

(5) That fraction is determined by applying section 432A(6) to (6B) and (8) of ICTA (apportionment of income and gains) as if—

(a) the credits or debits were income not directly referable to any category of business, and

(b) the references in section 432A(6) to assets directly referable to a category of business were references to assets linked to that category.

394 Special rules for some debtor relationships U.K.

(1) This section sets out the rules referred to in section 393(3) as to how far certain credits or debits given for the purposes of this Part in respect of liabilities representing a debtor relationship of an insurance company which are liabilities of its long-term insurance fund are referable to any particular category of its long-term business.

(2) If the liabilities are liabilities of an internal linked fund of the company relating to one category of long-term business, the credits or debits are referable to that category.

(3) If the liabilities are liabilities of an internal linked fund of the company relating to two or more such categories, the credits or debits are referable to those categories in the same proportions as the linked assets in the fund are apportioned to them under section 432ZA(4) of ICTA (linked assets).

(4) If—

(a) the liabilities arise from deposit back arrangements, and

(b) the business reinsured by the arrangements under which the deposit back arrangements are made (“the reinsurance arrangements”) is within one category of long term business,

the credits or debits are referable to that category.

(5) If—

(a) the liabilities arise from deposit back arrangements, and

(b) the business reinsured by the reinsurance arrangements is within two or more such categories,

the credits or debits are referable to those categories in the same proportions as the relevant proportions of the liabilities reinsured by the arrangements which are liabilities relating to those categories.

(6) For the purposes of subsection (5) “relevant proportion”, in relation to reinsured liabilities of any particular category of business, means the average of—

(a) the proportion of all the reinsured liabilities that are liabilities relating to that category at the beginning of the period of account, and

(b) the proportion of all the reinsured liabilities that are liabilities relating to that category at the end of that period.

(7) Debits relating to interest payable in respect of the late payment of any benefits are referable to the category of long-term business that comprises the effecting and carrying out of the policies or contracts under which the benefits are payable.