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HMRC internal manual

General Insurance Manual

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HM Revenue & Customs
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Technical provisions: periods of account beginning on or after 1 January 2000 and ending before 19 July 2007: the General Insurance Reserves (Tax) Regulations: background

The detailed machinery for the operation of the legislation is set out in the General Insurance Reserves (Tax) Regulations 2001 - SI2001/1757.

  • Regulation 1 - provided for the commencement of the regulations. They had effect for any period of account that began on or after 1 January 2001 and ended on or after 29 May 2001.
  • Regulation 2 - contained the interpretation of certain terms which occur in the regulations - CFC, Schedule 9A, connected company, and others.
  • Regulation 3 - contained the main part of the method of calculating the additional receipt or expense, set out in a series of ten Rules. It also defined or explained the terms which are used in carrying out the calculation - ‘balance sheet date’, ‘recalculation date’, ‘taken into account’, ‘later period of account’ and ‘earlier period of account’.
  • Regulation 4 - dealt with transfers of business and connected companies.
  • Regulation 5 - set out the rules where insurers account in foreign currencies.
  • Regulation 6 - applied the rules to insolvent companies.
  • Regulation 7 - contained rules for Lloyd’s underwriters (see Lloyd’s Manual Chapter 3 for more details).
  • Regulation 8 - set out the form and time limits of elections under FA00/S107 (4) and ICTA88/SCH24.
  • Regulation 9 - gave a rule for just and reasonable apportionment.
  • Regulation 10 - was introduced by the 2003 amendments to the Regulations and gave a commencement rule for insurers which come within the rules for the first time, for example, companies migrating into the UK or foreign companies which are taken over by UK companies and therefore become CFCs.

SI2003/2862 amended a number of the Regulations, particularly 3, 4, 5 and 8 in several important respects. There was also a transitional provision relating to regulation 5. The changes had effect for periods ending on or after 5 December 2003.

SI2005/3289 amended regulation 5 for periods ending on or after 21 December 2005. There was also a small change to Rule 8A of regulation 3.