PART 2Insurance companies carrying on long-term business
CHAPTER 3The I - E basis
Minimum profits charge
93Minimum profits test
1
This section applies if an insurance company has a BLAGAB trade profit for an accounting period.
2
A comparison must be made between—
a
the I - E profit or excess BLAGAB expenses for the accounting period, and
b
the BLAGAB trade profit for the accounting period,
adjusted as need be in accordance with sections 94 and 124.
3
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 to that amount.
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
b
the same amount is carried forward to the company’s next accounting period as an expense (see section 76).
94Adjustment 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 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 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.
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 distributions).
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 of a territory outside the United Kingdom.