GIM11010 - Captive insurers: background

The phrase “captive insurer” refers to a wholly owned subsidiary within a group of companies, which itself is not an insurance group. The captive’s business will consist wholly or mainly of insuring and reinsuring the risks of its fellow group members. The International Tax Handbook (ITH1700 onwards) provides guidance on captive insurance companies in the context of its discussion of the haven legislation on controlled foreign companies (CFCs). The ITH requires other tax offices to refer the agreement of profits of captive insurers which are subject to the CFC rules to the Large Business Service. The International Manual contains further guidance at INTM213000 onwards.