Explanatory note

Sections 55 to 149 of, and Schedules 17 to 19 to, the Finance Act 2012 established a new regime for the taxation of insurance companies. As from 1 January 2013 the starting point for the calculation of the trading profits of insurance companies has been the statutory accounts.

Schedule 17 to the Finance Act 2012 contains provisions which govern the transition from the old basis of taxation (based on the regulatory returns made to the Financial Services Authority) to the new basis. Paragraph 22 of that Schedule specifies amounts that have previously been taken into account for tax purposes are disregarded for any accounting period beginning on or after 1 January 2013. These Regulations amend paragraph 22 so that amounts derived from items that have been taken into account for tax purposes by a transferor company but which were disregarded under the transitional provisions as excluded items cannot brought into account again by a transferee company following a transfer of insurance business.

A Tax Information and Impact Note covering this instrument was published on 6 December 2011 alongside draft clauses for the 2012 Finance Bill and is available on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm. It remains an accurate summary of the impacts that apply to this instrument.