Taxation (International and Other Provisions) Act 2010

97 Companies with more than one category of business: restriction of credit

(1) Subsection (2) has effect if—

(a) an insurance company carries on more than one category of long-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 is to be allowed under the arrangements.

(2) 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 of ICTA) 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 and with the provisions of section 98, is attributable to that category of business.

(3) If 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 section 98(3) applies.

(4) If the relevant income arises from foreign business assets, the whole of the foreign tax is attributable to gross roll-up business, unless section 98(3) applies.

(5) If subsection (3) does not apply and the category of business in question is—

(a) basic life assurance and general annuity business, or

(b) PHI business,

the fraction of the foreign tax that is attributable to that category of business is the fraction given by—

where “the referable part” of the relevant income is the part of the relevant income which is referable to that category of business by virtue of any provision of section 432A of ICTA.

(6) Section 98(2) and (3) apply if the category of business in question is gross roll-up business.

(7) No part of the foreign tax is attributable to any category of business except as provided by subsections (3) to (6) and section 98(2) and (3).

(8) If under this section or section 98(2) and (3) an amount of foreign tax is for the purposes of this section attributable to gross roll-up business, credit in respect of the foreign tax so attributable is allowed only against corporation tax in respect of profits charged under section 436A of ICTA (charge on profits from gross roll-up business).