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HMRC internal manual

International Manual

Controlled Foreign Companies: United Kingdom companies carrying on life assurance business: Appropriate rate: not trading profits

Where the profits of a controlled foreign company fall to be apportioned on a United Kingdom resident company

  • which carries on a life assurance business in the accounting period in which the accounting period of the controlled foreign company ends, and 
  • the property or rights constitute to any extent assets of the United Kingdom company’s long term business fund, and 
  • the United Kingdom company is not charged to tax in respect of its profits from life assurance, then

the appropriate rate for the purposes of ICTA88/S747(4)(a) and ICTA88/SCH24/PARA1 will be as follows:-

(i) In relation to the policy holders’ part of any basic life assurance and general annuity business (“BLAGAB”) apportioned profit the appropriate rate is whatever single rate tax is already applicable in relation to the relevant accounting period.

(ii) The appropriate rate is nil in relation to so much of the apportioned profit as is referable to:

pension business,  


life reinsurance business, or  


overseas life assurance business,  


carried on by the United Kingdom company.