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HMRC internal manual

VAT Insurance

Types of insurance: captive insurance companies

Captive insurance companies are created to service the needs of a corporate group, effectively acting as a tied insurance company. You are likely to come across captive insurance companies in the control of very large traders. They are often located abroad.

Captive insurers are treated for regulatory and tax purposes like any other insurance company. Where a captive insurer provides insurance to corporate bodies with which it is grouped in a VAT group registration, such supplies are of course outside the scope of VAT in the normal way.