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HMRC internal manual

General Insurance Manual

Captive insurers: section 107 FA2000

The General Insurance Reserves (Tax) (Amendment) Regulations 2003 - SI2003/2862 - amended the Regulations which applied FA00/S107. See GIM6150 regarding the periods to which this legislation applied.

CFCs (and certain other categories of company) which became subject to the rules for the first time on or after 5 December 2003 had to carry out the calculations required under the Regulations as if the first earlier period of account to which the rules applied was the period immediately preceding the one in which it became subject to UK tax.

Thus, a CFC becoming subject to UK tax in APE 31 December 2004 had to recalculate its provisions of APE 31 December 2003, in accordance with the Rules in Regulation 3(3), as at 31 December 2004.

Any excess or deficit arising under section 107(2) or (3) was therefore brought into account in the computations for APE 31 December 2004.

The company could make an election under section 107(4) in respect of the provisions of APE 2003.

See GIM6420 for more details.