PART 2

Insurance companies carrying on long-term business
CHAPTER 7

Trading apportionment rules

Application of Chapter
114
1
This Chapter applies in the case of an insurance company which, as a result of section 66, has—
a
a business consisting of basic life assurance and general annuity business, and
b
a non-BLAGAB long-term business.
2
The rules contained in this Chapter determine—
a
how to allocate between those two businesses the profits or loss of the long-term business calculated in accordance with generally accepted accounting practice, and
b
how to allocate the tax adjustments in making the calculations mentioned in subsection (5)(a) and (b).
3
The amount of the profits or loss mentioned in subsection (2)(a) is referred to in this Chapter as the “accounting profit or loss”.
4
For the purposes of this Chapter “the tax adjustments” means the adjustments required or authorised by law in calculating for corporation tax purposes the profits of the long-term business (applying the same rules as apply to the calculation for those purposes of the profits of non-BLAGAB long-term business).
5
The rules contained in this Chapter have effect for the purpose of—
a
calculating the BLAGAB trade profit or loss of the company, and
b
calculating for corporation tax purposes the profits of the non-BLAGAB long-term business carried on by the company.