GIM11150 - Captive insurers: controlled foreign companies: funded accounting: mixed business

A CFC may carry on some business for which it accounts annually and other business for which it accounts on a funded basis. It has 18 months from the date of the replacement of the technical provision in respect of the funded business to pursue its ADP, as is the case for a company which accounts wholly on funded basis.

The accounts of a company with mixed business may recognise a loss in its funded business before the closure of the fund. Cases have been seen in which the computations reflect the net position of the annual and funded business. This is an anticipation of the loss in the funded business. The correct position is that the computation of the profit or loss of the funded business should be undertaken when the fund closes and not before.