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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: General Insurance Reserves (Tax) Regulations: companies new to the Regulations

Regulation 10: companies new to the Regulations

Regulation 10 was introduced by the 2003 amendments. It provided for a commencement rule for the application of the Regulations to companies which came within their scope for the first time, generally on or after 5 December 2003. The companies concerned were:

  • Controlled Foreign Companies newly acquired by a UK group on or after 5 December 2003
  • companies migrating into the UK on or after 5 December 2003
  • mutual insurers which demutualised in a period of account beginning on or after 5 December 2003
  • existing CFCs which became subject to the apportionment or Acceptable Distribution Policy rules in a period of account ending on or after 5 December 2003, and
  • companies which were excluded from the operation of the Regulations because they were in insolvency proceedings but which were not, on 5 December 2003, insolvent - see GIM6380.

In such cases, the company needed to carry out a FA00/S107 calculation in the first period of account in which it was subject to UK tax.

It needed to treat the provisions of the immediately preceding period as its ‘original provisions for the earlier period of account’ and could make a FA00/S107 (4) election for these amounts.