Commentary

D7.469 Minimum profits charge

Corporate tax
Corporate tax | Commentary

D7.469 Minimum profits charge

Corporate tax | Commentary

D7.469 Minimum profits charge

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.

It has always been a feature of life insurance taxation that a company taxed on the I-E basis must compare its profit calculated on that basis with the trading profit realised during the period to provide a minimum level of profit in charge. This comparison is usually referred to by practitioners as the 'minimum profits test'.

The effect of the comparison is that as a minimum the company will always be taxed on an amount of I-E profit equal to the shareholders' trade profits from writing the company's BLAGAB. This reflects the fact that the charge to tax on the I-E profits denies HMRC the right to charge tax on the trade profits so a

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