GIM10260 - Non-resident insurers: other taxation issues: loan relationships & derivative contracts

GIM5090 onwards describe the effect of Chapter 2 Part 4 FA 1996 on general insurers. GIM5100 says that companies must use the accounting method shown in the Companies Act accounts, and not the regulatory return. For non-resident companies this includes companies who produce accounts in accordance with Part 2 Schedule 21D of the Companies Act (those companies where the home state does not require audit and disclosure of accounts itself). Companies who file their home state accounts in accordance with Part I Schedule 21D must use those home state accounts as the basis for the Chapter 2 Part 4 FA 1996 amounts.

For periods beginning on or after 1 October 2002, companies whose home state accounting practice does not permit the use of mark-to-market where UK GAAP would permit such a method, may elect that mark-to-market shall be used for the loan relationships and derivative contracts concerned. See CFM5142 onwards (loan relationships) and CFM13536 onwards (derivative contracts).