Commentary

D7.5134 Taxation of PHI—FSA reserve releases

Corporate tax
Corporate tax | Commentary

D7.5134 Taxation of PHI—FSA reserve releases

Corporate tax | Commentary

D7.5134 Taxation of PHI—FSA reserve releases

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.

In December 2006 the FSA published Policy Statement PS 06/14 Prudential Changes for Insurers, which permitted insurers to relax their reserving requirements in respect of certain types of business. The effect of this was a large release of mathematical reserves across the industry (sums of several billions of pounds) and an increase in surplus and hence taxable profit of a like amount in those insurers who were able to benefit from the relaxation. Following industry representations asking for the tax effect of this release to be mitigated, the government was

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