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HMRC internal manual

General Insurance Manual

Non-resident insurers: scope of UK taxing rights: section 11 ICTA & Article 7 OECD Model: application to insurers

Underwriting profitThe balance of premiums, claims, expenses and provisions (the underwriting result) as disclosed in the return to the Financial Services Authority, clearly falls within both Section 11 and Article 7, allowing an FSA return for overseas insurers to be used for tax purposes.

In the case of an EEA insurer making regulatory returns to its Home State figures will have to be taken from whatever accounts and information are prepared by the company and submitted with its tax return. Details supplied by the company to its Home State regulator as UK branch business in its Article 44.2 Third Directive return is a starting point if nothing else is available.

In the case of a non-EEA insurer, the FSA return will be a return of UK branch business, unless the insurer is a UK deposit insurer (GIM10090), in which case the return will be of EEA business.


GIM10120 explains that Article 7(3) of the OECD Model allows expenses incurred for the purpose of the permanent establishment, including executive and general administrative expenses, whether incurred in the State where the permanent establishment is situated or elsewhere. This provision does no more than re-affirm UK domestic law, and is explicitly reflected at ICTA88/S11AA (4).

Equalisation provisions

GIM7290+ sets out special rules for EEA insurers who do not make a UK regulatory return. Non-EEA insurers follow the same provisions as apply to UK insurers.