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

1

This section applies 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 Part 2 of FA 2012, to a particular category of business must not exceed the fraction of the foreign tax which, in accordance with subsection (3), is attributable to that category of business.

3

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

$\frac{\mathrm{RPRI}}{\mathrm{TRI}}$

where—

RPRI is the amount of the relevant income referable to the category of business in question in accordance with section 97A, and

TRI is the total amount of the relevant income.

97ACommercial allocation of relevant income to different categories of long-term business

1

The amount of the relevant income that, for the purposes of section 97, is to be regarded as referable to a category of business is to be determined in accordance with an acceptable commercial method adopted by the company for the period of account in which the relevant income arises.

2

A method is an “acceptable commercial method” if, in all the circumstances, it can reasonably be regarded as providing a fair method for the purposes of section 97 for determining for a period of account the amount of any income or gain arising in the period that is referable to a particular category of long-term business carried on by the company.

3

The Treasury may make regulations for the purposes of this section—

a

prescribing cases in which a method is, or is not, to be regarded as an acceptable commercial method, and

b

prescribing cases in which the only acceptable commercial method is to be a method prescribed, or of a description prescribed, in the regulations.

4

Subject to any provision made by regulations under subsection (3), the method adopted for the purposes of this section for a period of account must be consistent with the method adopted for the purposes of section 98 or 115 of FA 2012 for that period.