The Finance Act 2012 introduced a new regime for taxing basic life assurance and general annuity business (BLAGAB) of life insurance companies.
Specific anti-avoidance rules are required for re-insurance arrangements of BLAGAB to ensure the tax on investment returns from assets backing life insurance policies remains within the special tax regime. Regulations define the scope of the charge and provide the method for calculating investment returns.
These new regulations replace the previous regulations, Insurance Companies (Taxation of Reinsurance Business) Regulations 1995 (SI1995/1370) with rules that reflect modern commercial practice.
This tax information and impact note has been published alongside a consultation on the draft Insurance Companies (Taxation of Re-insurance Business) Regulations 2018.