Finance Act 2012

Separate businesses etc

66 Separate businesses for BLAGAB and other long-term business

(1) If an insurance company carries on—

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

(b) other long-term business,

the general rule is that business within paragraphs (a) and (b) is to be treated for corporation tax purposes as two separate businesses carried on by the company.

(2) One of the separate businesses is to consist of the basic life assurance and general annuity business.

(3) The other separate business is to be regarded for corporation tax purposes as a single trade consisting of the other long-term business.

(4) If an insurance company carries on—

(a) life assurance business none of which is basic life assurance and general annuity business, and

(b) PHI business,

the company is to be treated for corporation tax purposes as carrying on a single trade consisting of the businesses within paragraphs (a) and (b).

(5) For the purposes of this Part “non-BLAGAB long-term business” means—

(a) a single trade within subsection (3) or (4), or

(b) in a case where an insurance company carries on life assurance business none of which is basic life assurance and general annuity business but does not carry on other long-term business, that life assurance business.

(6) If an insurance company carries on short-term insurance business, that business is to be regarded for corporation tax purposes as a separate trade.

(7) For this purpose “short-term insurance business” means any insurance business which is not long-term business.

67 Exception where BLAGAB small part of long-term business

(1) There is an exception to the general rule set out in section 66(1) if for an accounting period of an insurance company substantially all of its long-term business is not basic life assurance and general annuity business.

(2) In that case, there is for the accounting period to be no separate business consisting of the company’s basic life assurance and general annuity business.

(3) There is instead to be one business that is to be regarded for corporation tax purposes as a single trade of the company consisting of its long-term business.

(4) That single trade is to be regarded as “non-BLAGAB long-term business” for the purposes of this Part.

(5) Accordingly, references in this Part (apart from in section 66 and this section) to a company’s basic life assurance and general annuity business do not include any business which, as a result of this section, is regarded as non-BLAGAB long-term business.