PART 2

Insurance companies carrying on long-term business
CHAPTER 1

Introductory

Outline of provisions of Part

Overview
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1
This Part makes special provision for corporation tax purposes in relation to life assurance business and other long-term business carried on by insurance companies.
2
Chapter 1 explains some of the key concepts for the purposes of this Part, including the concept of basic life assurance and general annuity business (abbreviated to “BLAGAB”).
3
Chapter 2—
a
provides for the profits of BLAGAB to be subject to a charge to corporation tax on the I - E basis as the profits of a separate business, and
b
provides for the profits of other long-term business to be charged to corporation tax under section 35 of CTA 2009 as the profits of a single trade.
4
Chapter 3 sets out the rules applicable to the I - E charge (which operate in part by reference to the calculation of an insurance company’s BLAGAB trade profit or loss).
5
Chapter 4 sets out rules for determining for the purposes of the I - E charge how to apportion items to an insurance company’s basic life assurance and general annuity business.
6
Chapter 5—
a
provides for the policyholders’ share of the I - E profit to be charged at the policyholders’ rate (the basic rate of income tax), and
b
provides for policyholder tax to be taken into account in calculating an insurance company’s BLAGAB trade profit or loss.
7
Chapter 6 contains special rules that are to apply for the purpose of calculating an insurance company’s BLAGAB trade profit or loss or the profits of an insurance company’s other long-term business.
8
Chapter 7 sets out rules for determining for the purposes of that calculation how to allocate items between BLAGAB and other long-term business.
9
The remainder of the Part contains—
a
provision in relation to assets held for the purposes of an insurance company’s long-term business (see Chapter 8),
b
provision for relieving BLAGAB trade losses and restrictions in relation to the policyholders’ share of an I - E profit (see Chapter 9),
c
provision in relation to the transfer of BLAGAB or other long-term business (see Chapter 10), and
d
definitions and other supplementary material (see Chapters 11 and 12).