HMRC is consulting until 28 March 2018 on draft regulations to update and replace the 1995 regulations concerning the taxation of investment returns from basic life assurance and general annuity business (BLAGAB), where life insurance companies reinsure this business with a reinsurance company.
HMRC is consulting until 28 March 2018 on draft regulations to update and replace the 1995 regulations concerning the taxation of investment returns from basic life assurance and general annuity business (BLAGAB), where life insurance companies reinsure this business with a reinsurance company.
The new regime introduced by Finance Act 2012 includes rules providing for imputation of an investment return in certain circumstances. The draft Insurance Companies (Taxation of Re-insurance Business) Regulations 2018 set out:
when a reinsurer’s business will be taxed as BLAGAB;
when a return will be imputed to the life insurer; and
the formula for calculating the imputed return.
These rules ensure that life insurance companies who reinsure BLAGAB are not able to avoid tax on their policyholders’ investment returns. The changes aim to simplify the rules around imputation in a way that reflects modern commercial practice, allowing insurance companies to reinsure risks relating to BLAGAB in appropriate circumstances. See bit.ly/2F0nOkE.
HMRC is consulting until 28 March 2018 on draft regulations to update and replace the 1995 regulations concerning the taxation of investment returns from basic life assurance and general annuity business (BLAGAB), where life insurance companies reinsure this business with a reinsurance company.
HMRC is consulting until 28 March 2018 on draft regulations to update and replace the 1995 regulations concerning the taxation of investment returns from basic life assurance and general annuity business (BLAGAB), where life insurance companies reinsure this business with a reinsurance company.
The new regime introduced by Finance Act 2012 includes rules providing for imputation of an investment return in certain circumstances. The draft Insurance Companies (Taxation of Re-insurance Business) Regulations 2018 set out:
when a reinsurer’s business will be taxed as BLAGAB;
when a return will be imputed to the life insurer; and
the formula for calculating the imputed return.
These rules ensure that life insurance companies who reinsure BLAGAB are not able to avoid tax on their policyholders’ investment returns. The changes aim to simplify the rules around imputation in a way that reflects modern commercial practice, allowing insurance companies to reinsure risks relating to BLAGAB in appropriate circumstances. See bit.ly/2F0nOkE.
