D7.5100 Receipts to be taken into account
The rules in this division apply for accounting periods beginning before 1 January 2013. For accounting periods beginning on or after 1 January 2013 see Division D7.4.
The life assurance trade profit provisions prescribe exactly which amounts brought into account on the company's regulatory return are to be taken into account when calculating a trading profit. Those amounts are:
(a) investment income receivable before deduction of tax;
(b) any increase in the value of non-linked assets;
(c) any increase in the value of linked assets;
(d) other income; or
(e) transfers of insurance business to the company.
Any decrease in the value of assets, whether linked or not, brought into account is instead treated as an expense1.
These categories equate to the headings of lines 12 to 15 and 31 respectively of Form 40 of the regulatory return. By ensuring that all amounts brought into account in these lines are explicitly included in the measure of profit computation even when those amounts would not normally be taxable on first principles, the legislation succeeds in doing away with companies' ability to argue that certain sums, particularly those accounted for as 'other income', are outside the charge to tax.
It had always been accepted that FA 1989, s 83 had primacy in determining amounts to be taxed in a computation prepared under