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HMRC internal manual

General Insurance Manual

Taxation of general insurance: introduction

Until 1996 (when tax relief was introduced for equalisation reserves - GIM7000+) there was little fiscal legislation devoted to general insurance, and none relating to specific classes of business (apart from an obscure capital gains provision relating to the 1967 devaluation of sterling in TCGA92/SCH11/PARA14).

This manual is concerned only with general insurance business as defined for regulatory purposes, that is, within Part 1 of Schedule 1 to the Regulatory Activities Order, SI2001/544. The taxation of all long term business is dealt with in the Life Assurance Manual.

Some companies that specialise in the provision of healthcare insurance write both long-term business and general business within regulatory classes 1 and 2 (Accident and Sickness). These so-called healthcare composites may account for their general business as though it were long-term business.