PART 2

Insurance companies carrying on long-term business
CHAPTER 5

I - E profit: policyholders' rate of tax

Tax rate on policyholders' share of I - E profit

Rules for determining policyholders' share of I - E profit
103
1
This section determines for the purposes of section 102 the policyholders' share of the I - E profit of an insurance company for an accounting period.
2
If the basic life assurance and general annuity business of the company carried on by the company in the accounting period is mutual business, the policyholders' share of the I - E profit is the whole of that profit.
3
In any other case, the policyholders' share of the I - E profit is determined as follows.
4
The first step is to calculate whether the company has a BLAGAB trade profit for the accounting period, and, if so, its amount.
5
If the company does not have a BLAGAB trade profit for that period, the policyholders' share of the I - E profit is the whole of that profit.
6
If—
a
the company has a BLAGAB trade profit for that period, and
b
the adjusted amount of the BLAGAB trade profit is less than the amount of the I - E profit for that period,
the difference between those amounts represents the policyholders' share of the I - E profit.
7
If—
a
the company has a BLAGAB trade profit for that period, and
b
the adjusted amount of the BLAGAB trade profit is equal to or more than the amount of the I - E profit,
there is no policyholders' share of the I - E profit.
8
References to the adjusted amount of the BLAGAB trade profit are to be read in accordance with section 104.
S. 103 applied by 2010 c. 4, s. 269ZE(10) (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 16)