GIM11170 - Captive insurers: section 107 FA 2000

The General Insurance Reserves (Tax) (Amendment) Regulations 2003 – SI2003/2862 – amended the regulations which apply FA00/S107.

CFCs (and certain other categories of company) which become subject to the rules for the first time on or after 5 December 2003 must carry out the calculations required under the regulations as if the first earlier period of account to which the rules apply is the period immediately preceding the one in which it became subject to UK tax.

Thus, a CFC becoming subject to UK tax in APE 31 December 2004 must recalculate its provisions of APE 31 December 2003, in accordance with the Rules in Regulation 3(3), as at 31 December 2004.

Any excess or deficit arising under section 107(2) or (3) is therefore brought into account in the computations for APE 31 December 2004.

The company may make an election under section 107(4) in respect of the provisions of APE 2003.

See GIM6420 for more details.