PART XVIII DOUBLE TAXATION RELIEF
CHAPTER II RULES GOVERNING RELIEF BY WAY OF CREDIT
Miscellaneous rules
F1804B Insurance companies carrying on more than one category of business: restriction of credit.
(1)
Where—
(a)
an insurance company carries on more than one category of F2long-term business in an accounting period, and
(b)
there arises to the company in that period any income or gain (“the relevant income”) in respect of which credit for foreign tax falls to be allowed under any arrangements,
subsection (2) below shall have effect.
(2)
In any such case, the amount of the credit for foreign tax which, under the arrangements, is allowable against corporation tax in respect of so much of the relevant income as is referable (in accordance with the provisions of sections 432ZA to 432E F3. . . ) to a particular category of business must not exceed the fraction of the foreign tax which, in accordance with the following provisions of this section, is attributable to that category of business.
F4(3)
Where the relevant income arises from an asset which is linked solely to a category of business, the whole of the foreign tax is attributable to that category of business, unless the case is one where subsection (7) below applies.
(3A)
Where the relevant income arises from foreign F5business assets, the whole of the foreign tax is attributable to gross roll-up business, unless the case is one where subsection (7) below applies.
(4)
Where subsection (3) above does not apply and the category of business in question is—
(a)
basic life assurance and general annuity business, or
(b)
F6PHI business,
the fraction of the foreign tax that is attributable to that category of business is the fraction whose numerator is the part of the relevant income which is referable to that category by virtue of any provision of section 432A F7. . . and whose denominator is the whole of the relevant income.
(5)
Subsections (6) and (7) below apply where the category of business in question is F8gross roll-up business.
(6)
Where—
(a)
subsection (3) above does not apply, and
(b)
some or all of the relevant income is taken into account in accordance with section 83 of the M1Finance Act 1989 in an account in relation to which the provisions of section 432C F9. . . apply,
the fraction of the foreign tax that is attributable to F10gross roll-up business is the fraction whose numerator is the part of the relevant income which is referable to F10gross roll-up business by virtue of any provision of section 432C F9. . . and whose denominator is the whole of the relevant income.
(7)
Where some or all of the relevant income falls to be taken into account in determining in accordance with section 83(2) of the Finance Act 1989 the amount referred to in section 432E(1) as the net amount, the fraction of the foreign tax that is attributable to F11gross roll-up business is the fraction—
(a)
(b)
whose denominator is the whole of that F14investment income.
F15(7A)
The Treasury may by regulations amend subsection (7) above; and the regulations may include amendments having effect in relation to accounting periods during which they are made.
(8)
No part of the foreign tax is attributable to any category of business except as provided by subsections (3) to (7) above.
F16(9)
Where for the purposes of this section an amount of foreign tax is attributable to gross roll-up business, credit in respect of the foreign tax so attributable shall be allowed only against corporation tax in respect of profits chargeable under section 436A.