The Insurance Contracts (Tax) (Change in Accounting Standards) Regulations 2022

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations made provision in relation to the adoption by insurance companies of International Accounting Standard 17 (“IFRS 17”) issued by the International Accounting Standards Board.

Part 1 is introductory and makes provision for citation, commencement, effect and interpretation.

Part 2 makes transitional provisions so that certain amounts that would otherwise be subject to corporation tax on the adoption of IFRS 17 are instead brought into account over 10 years. Provision is made to apportion the amount between different parts of a company’s business and to bring the amount into account on a transfer or cessation of the business or an election under section 18A of the Corporation Tax Act 2009 before the expiry of the 10-year period. Amounts subject to this spreading treatment are excluded from the calculation of adjustments on a change of basis under Chapter 14 of Part 3 of the Corporation Tax Act 2009.

Part 3 is of general application and makes provision for amounts which in accordance with IFRS 17 are recognised as items of other comprehensive income to be brought into account for corporation tax and for the year in which amounts are brought into account for the purposes of the meaning of “ordinary BLAGAB management expenses”.

A Tax Information and Impact Note covering this instrument will be published online at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.