Finance Act 2012

55 Overview U.K.

(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).