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HMRC internal manual

General Insurance Manual

Technical provisions: periods of account beginning on or after 1 January 2000 and ending before 19 July 2007: General Insurance Reserves (Tax) Regulations: intervening periods

Regulation 3: Rule 8: intervening periods

The difference between the original provisions and the discounted recalculated provisions at the end of the later period of account was the excess or deficiency on which the tax adjustment was based. However, in most cases liabilities would have been settled over a number of years.

These periods of account between the earlier and later periods of account were referred to as ‘intervening periods’.

For example, in relation to a recalculation of the liabilities of the 2000 period of account at 31 December 2003, 2003 is the later period of account, and 2001 and 2002 are intervening periods. There will have been recalculations of the liabilities as at 31 December 2001 and 2002, and tax adjustments made based on these recalculations.

To avoid taxing or relieving the same amounts more than once, Rule 8 required the cumulative excess or deficiency to be reduced by the amounts that had already been taken into account in the recalculations of the same earlier period in any previous ‘intervening periods’. The amount found after adjusting for all previous intervening years’ adjustments was the amount finally to be treated as an excess under FA00/S107 (2) or a deficiency under FA00/S107 (3).

Rule 8 along with Rule 2 was changed as part of the 2003 amendments to the Regulations to remove the ten year roll up feature (see GIM6200). Intervening years subsequently referred to any period of account between the earlier period of account and the later period of account in which the recalculation was done.