Controlled Foreign Companies carrying on general insurance business: Special rules for controlled foreign companies carrying on general insurance business
ICTA88/S755B and The Non-Resident Companies (General insurance Business) Regulations 1999 introduce rules which:
- allow United Kingdom companies with an interest in a controlled foreign company which prepares accounts on an approved funded basis, to return chargeable profits computed on that basis and to amend returns within the time limit when the fund is closed,
- enable controlled foreign companies carrying on general insurance accounted for on an approved funded basis to pursue an acceptable distribution policy,
- enable United Kingdom companies to complete their return without knowing at the date of the return whether an overseas company is subject to a lower level of taxation, and also
- put controlled foreign companies using funds longer than allowed under United Kingdom rules in the same position, as regards both the computation of profits and the deduction of equalisation reserves, as companies carrying on business in the United Kingdom.