F1Part 21ARisk transfer schemes
Basic definitions
937FRing-fenced scheme losses and relevant scheme profits
1
Subsection (2) applies if—
a
a company makes one or more scheme losses in an accounting period in relation to a risk transfer scheme, and
b
disregarding any profits or losses made otherwise than as a result of the scheme, the relevant group makes a pre-tax economic loss in the period as a result of fluctuations in the scheme rate, index or value.
2
The relevant proportion of each scheme loss made by the company in the accounting period is a “ring-fenced scheme loss”.
3
For this purpose “ the relevant proportion ” means—
where—
A is the total of the scheme losses made in the period in relation to the scheme by the members of the relevant group,
B is the total of the scheme profits made in the period in relation to the scheme by the members of the relevant group, and
C is the pre-tax economic loss referred to in subsection (1)(b).
4
Subsection (5) applies if—
a
a company makes one or more scheme profits in an accounting period in relation to a risk transfer scheme, and
b
disregarding any profits or losses made otherwise than as a result of the scheme, the relevant group makes a pre-tax economic profit in the period as a result of fluctuations in the scheme rate, index or value.
5
The relevant proportion of each scheme profit made by the company in the accounting period is a “relevant scheme profit”.
6
For this purpose “ the relevant proportion ” means—
where—
A is the total of the scheme profits made in the period in relation to the scheme by the members of the relevant group,
B is the total of the scheme losses made in the period in relation to the scheme by the members of the relevant group, and
C is the pre-tax economic profit referred to in subsection (4)(b).
Pt. 21A inserted (with effect in accordance with Sch. 16 para. 5 of the amending Act) by Finance Act 2010 (c. 13), Sch. 16 para. 3