The Non-resident Insurance Companies Regulations 2003

Explanatory Note

(This note is not part of the Regulations)

These Regulations modify the effect of section 11AA of the Income and Corporation Taxes Act 1988 (c. 1) in respect of non-resident insurance companies. Section 11AA, inserted by section 149(2) of the Finance Act 2003 (c. 14), provides for the determination for the purposes of corporation tax of the amount of profits attributable to a permanent establishment in the United Kingdom of a company that is not resident in the United Kingdom. Regulation 3 is intended to secure that in determining the amount of profits of the permanent establishment it is assumed that the permanent establishment has free assets of an amount not less than it would have in the circumstances described in section 11AA(2), namely if the permanent establishment were a distinct and separate enterprise, engaged in the same or similar activities under the same or similar conditions, and dealing wholly independently with the non-resident company of which it is a permanent establishment.