PART 2Insurance companies carrying on long-term business

CHAPTER 3The I - E basis

Definitions of expressions comprising “I”

75Meaning of “BLAGAB chargeable gains” etc

1

This section explains for the purposes of section 73 how to calculate the BLAGAB chargeable gains of the company for the accounting period as adjusted for allowable losses.

  • Step 1 First, calculate the chargeable gains—

    1. a

      that accrue to the company in the accounting period from the disposal of assets held for the purposes of the company's long-term business, and

    2. b

      that are referable, in accordance with Chapter 4, to its basic life assurance and general annuity business.

  • Step 2 Then, deduct from the amount of those gains—

    1. a

      any allowable losses that accrue to the company in the accounting period from the disposal of assets held for the purposes of the company's long-term business and that are so referable, and

    2. b

      so far as not previously deducted from any chargeable gains, any allowable losses that accrued to the company in a previous accounting period from the disposal of assets held for the purposes of the company's long-term business and that were so referable.

    The resulting amount is the amount of the BLAGAB chargeable gains of the company for the accounting period as adjusted for allowable losses.

2

The deduction at step 2 may reduce an amount to nil but no further.

3

For the purposes of this section no account is to be taken of a chargeable gain or allowable loss accruing to the company on a disposal for the purposes of TCGA 1992 of an asset that forms part of the long-term business fixed capital of the company.

4

References in this section to chargeable gains or allowable losses are references to those gains or losses as calculated in accordance with the rules contained in TCGA 1992.