# The General Insurance Reserves (Tax) Regulations 2001, Regulation 5: Currency elections


(1) Subject to the following paragraphs of this regulation, the general insurer may make an election, in relation to the provisions for an earlier period of account which are to be recalculated under section 107, that—
(a) the calculations should be carried out in a currency other than sterling, and
(b) a foreign currency discount rate shall be applied under paragraph (b) of Rule 5.4. in regulation 3(3),
and that currency and discount rate shall, to the extent mentioned in paragraph (4), apply to all calculations in all later periods of account, in so far as the earlier period of account is the relevant earlier period referred to in regulation 3(3).
(2) An election may be made where—
(a) any liabilities, to which a provision for claims outstanding relates, are denominated in any of the following currencies, or
(b) the accounting currency is any of those currencies,
where the currencies mentioned are United States dollars, Canadian dollars, Australian dollars, euro, Swiss francs or Japanese yen (and the currency in question is referred to as “the relevant foreign currency”).
(3) In this regulation, “the accounting currency” means—
(a) the currency determined in accordance with sections 92 to 94 of the Finance Act 1993 (where those sections apply) in which the profits and losses of the general insurer’s business for the later period of account fall to be computed and expressed, or
(b) in a case in which the relevant liability relates to a part of that business which is treated as a separate business by section 93(6) of that Act, the currency so determined for that period for that part of the business.
(4) Where an election is made, the calculation under Rules 2 to 9 in regulation 3(3) in respect of—
(a) the whole of the liabilities denominated in the relevant foreign currency, in a case falling within paragraph (2)(a), or
(b) the whole of the liabilities of the business, or of the part of a business referred to in paragraph (3)(b), as the case may be, in a case falling within paragraph (2)(b),
shall be carried out in the relevant foreign currency, and a foreign currency discount rate in paragraph (b) of Rule 5.4. shall apply to those liabilities.
(5) An election shall relate to a single earlier period of account, and for each period—
(a) an election may be made under either paragraph (2)(a) or (b) but not both, but
(b) in a case within paragraph (2)(a), may be made, or not made, separately in relation to each such foreign currency, and
(c) in a case within paragraph (2)(b), may be made, or not made, separately in relation to each part of a business referred to in paragraph (3)(b).
(6) An election may be made during the period mentioned in regulation 8(1) (that is, the period of two years following the earlier period of account), or in a case falling within paragraph (2) of regulation 8, that period as extended by that paragraph.
(7) Where any calculations in relation to a later period of account have been made before an election, any necessary recalculations shall be done.
(8) An election may (subject to this regulation) be varied or withdrawn at any time in the period during which it could have been made.

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Source: https://www.legislation.gov.uk/uksi/2001/1757/regulation/5 (the official version)
Page: https://openlegislation.uk/general-insurance-reserves-tax-regulations-2001/regulation-5
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.