PART 2Insurance companies carrying on long-term business
CHAPTER 7Trading apportionment rules
C1115Commercial allocation of accounting profit or loss and tax adjustments
1
The accounting profit or loss, and the tax adjustments, are to be allocated between the two separate businesses in accordance with an acceptable commercial method adopted by the company.
2
A method is an “acceptable commercial method” if it secures that the accounting profit or loss, and the tax adjustments, are allocated to the two separate businesses in a way that fairly represents the contribution made by those businesses to the accounting profit or loss as adjusted to take into account the tax adjustments.
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—
a
must be consistent with the method adopted for the purposes of section 98 for that period, and
b
in the case of an overseas life insurance company, must also be consistent with the method for that period for attributing assets in accordance with the provision made by or under Chapter 4 of Part 2 of CTA 2009 to its permanent establishment in the United Kingdom.