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HMRC internal manual

International Manual

Foreign Permanent Establishments of UK Companies: anti-diversion rule: Initial gateway filter - Does Chapter 7 apply?

This applies for relevant accounting periods beginning on or after 1 January 2013.

Does Chapter 7 apply?

TIOPA10/Part 9A/S371CF provides that Chapter 7 (captive insurance business) applies for an accounting period only if at any time during that period the main part of the business is insurance business, and the assumed total profits include amounts derived (directly or indirectly) from contracts of insurance as specified in S371CF(2). These are contracts entered into with;

  • a UK resident connected company;
  • a non-UK resident connected company acting through a UK permanent establishment; or
  • a UK resident person where the contract is linked (directly or indirectly) to the provision of goods or services to the UK resident person by a UK connected company. This excludes services provided as part of insurance business.