Commentary

D7.426 Allocations to policyholders

Corporate tax
Corporate tax | Commentary

D7.426 Allocations to policyholders

Corporate tax | Commentary

D7.426 Allocations to policyholders

The rules in this division apply for accounting periods beginning on or after 1 January 2013. For accounting periods beginning before 1 January 2013 see Division D7.5.

One of the earliest cases dealing with life insurance taxation (Last v London Assurance Ltd 2 TC 100) established the principle that bonuses to policyholders were allocations of profit rather than expenses incurred in earning those profits and therefore did not qualify for tax relief. Since 1923 the legislation governing life insurance taxation has therefore made it explicit that amounts allocated to policyholders are to be deducted as expenses in

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