GIM6420 - Technical provisions: periods of account beginning on or after 1 January 2000: General Insurance Reserves (Tax) Regulations: companies new to the Regulations

Regulation 10: companies new to the Regulations

Regulation 10 was introduced by the 2003 amendments. It provides for a commencement rule for the application of the regulations to companies which come within their scope for the first time, and that is generally on or after 5 December 2003. The companies concerned will be:

• CFCs newly acquired by a UK group on or after 5 December 2003,
• companies migrating into the UK on or after 5 December 2003,
• mutual insurers which demutualise in a period of account beginning on or after 5 December 2003,
• existing CFCs which become subject to the apportionment or ADP rules in a period of account ending on or after 5th December 2003, and
• companies which were excluded from the operation of the regulations because they were in insolvency proceedings but which were not, on 5 December 2003, insolvent – see GIM6380.

In such cases, the company must carry out a FA00/S107 calculation in the first period of account in which it is subject to UK tax.

It must treat the provisions of the immediately preceding period as its “original provisions for the earlier period of account” and can make a FA00/S107 (4) election for these amounts.