GIM6190 - Technical provisions: periods of account beginning on or after 1 January 2000: the General Insurance Reserves (Tax) Regulations: background

The detailed machinery for the operation of the legislation is set out in the General Insurance Reserves (Tax) Regulations 2001 – SI2001/1757.

• Regulation 1 – provides for the commencement of the regulations. They have effect for any period of account that begins on or after 1 January 2001 and ends on or after 29 May 2001.
• Regulation 2 – contains the interpretation of certain terms which occur in the regulations – CFC, Schedule 9A, connected company, and others.
• Regulation 3 – contains the main part of the method of calculating the additional receipt or expense, set out in a series of ten Rules. It also defines or explains the terms which are used in carrying out the calculation – “balance sheet date”, “recalculation date”, “taken into account”, “later period of account” and “earlier period of account”.
• Regulation 4 – deals with transfers of business and connected companies.
• Regulation 5 – sets out the rules where insurers account in foreign currencies.
• Regulation 6 – applies the rules to insolvent companies.
• Regulation 7 – contains rules for Lloyd’s underwriters (see Lloyd’s Manual Chapter 3 for more details).
• Regulation 8 – sets out the form and time limits of elections under FA00/S107 (4) and ICTA88/SCH24.
• Regulation 9 – gives a rule for just and reasonable apportionment.
• Regulation 10 – was introduced by the 2003 amendments to the Regulations and gives a commencement rule for insurers which come within the rules for the first time, for example, companies migrating into the UK or foreign companies which are taken over by UK companies and therefore become CFCs.

SI2003/2862 amended a number of the Regulations, particularly 3, 4, 5 and 8 in several important respects. There is also a transitional provision relating to regulation 5. The changes have effect for periods ending on or after 5 December 2003.

SI2005/3289 amended Regulation 5 for periods ending on or after 21 December 2005. There was also a small change to Rule 8A of Regulation 3