Commentary

D7.5159 Accounting periods and periodical returns

Corporate tax
Corporate tax | Commentary

D7.5159 Accounting periods and periodical returns

Corporate tax | Commentary

D7.5159 Accounting periods and periodical returns

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.

An insurance business transfer scheme often occurs in a way that does not lend itself to simple application of the normal rules for taxing life insurance business. For example the transferor may transfer only part of its business or may not prepare a regulatory return to the date on which its accounting period is deemed to end. This may cause problems in determining precisely what period should form the basis of assessment, how figures required for a tax computation should be identified in the absence of a regulatory return and how apportionment fractions should be calculated when transfers take place other than at the very beginning or end of a period of account. As well as these simple practical difficulties, HMRC had seen examples of companies deliberately taking advantage of the statutory uncertainty to reduce their tax charge.

As a starting point the transfer of the whole of the company's long-term business will invoke the general corporation tax rule that an accounting period ends following the cessation of trade although this will not apply to a composite company that continues to write general insurance business1. The legislation must then deal with those circumstances when the transfer occurs at a point in time at which the company would not normally produce a regulatory

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial