Corporation Tax Act 2009

565Relevant amount where the relevant company uses fair value accountingU.K.
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(1)This section applies if the relevant company brings credits and debits in respect of the investment life insurance contract into account on the basis of fair value accounting.

(2)If this section applies, the relevant amount for section 563 is—

where—

PC is the profit from the contract (see subsections (3) and (4)), and

AR is the appropriate rate for the accounting period (as defined in section 563(6)).

(3)For the purposes of this section, except where subsection (4) applies, the profit from the contract is any amount by which—

(a)the amount payable as a result of the related transaction, exceeds

(b)the fair value of the contract at the beginning time (see subsection (6)).

(4)If the related transaction is an assignment or surrender of only part of the rights conferred by the contract, the profit from the contract is any amount by which—

(a)the amount payable as a result of the related transaction, exceeds

(b)the relevant fraction of the fair value of the contract at the beginning time.

(5)In subsection (4) “the relevant fraction” means—

where—

C is the amount payable as a result of the related transaction, and

FVC is the fair value of the contract immediately before the related transaction.

(6)In this section “the beginning time” means—

(a)if the contract was made before the beginning of the first accounting period of the company beginning on or after 1st April 2008, at the beginning of that period, and

(b)otherwise when the contract was made.