INTM212030 - Controlled Foreign Companies: United Kingdom companies carrying on life assurance business

Appropriate rate: not Case I profits

Where the profits of a controlled foreign company fall to be apportioned on a United Kingdom resident company

• which carries on a life assurance business in the accounting period in which the accounting period of the controlled foreign company ends, and
• the property or rights constitute to any extent assets of the United Kingdom company’s long term business fund, and
• the United Kingdom company is not charged to tax under Case I of Schedule D in respect of its profits from life assurance, then

the appropriate rate for the purposes of ICTA88/S747(4)(a) and ICTA88/SCH24/PARA1 will be as follows:-

(i) In relation to the policy holders’ part of any BLAGAB apportioned profit the appropriate rate is whatever single rate tax under FA98/S88A(1) is already applicable in relation to the relevant accounting period.
(ii) The appropriate rate is nil in relation to so much of the apportioned profit as is referable to:

pension business,
life reinsurance business, or
overseas life assurance business,
carried on by the United Kingdom company.