Commentary

D7.527 Other income, gains and losses – accounting periods beginning before 1 January 2007

Corporate tax
Corporate tax | Commentary

D7.527 Other income, gains and losses – accounting periods beginning before 1 January 2007

Corporate tax | Commentary

D7.527 Other income, gains and losses – accounting periods beginning before 1 January 2007

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.

For accounting periods beginning before 1 January 2007 the principles of apportionment were similar but the mechanics were different. One of the major differences was to deal with apportionments for the few companies that had identified and reattributed their inherited estate. The driver for these changes was the belief in HMRC that some companies that had identified excess assets that did not belong to the current generation of policy holders were retaining those assets in their long-term insurance funds rather than distributing them to shareholders and were thus benefiting from the apportionment of income and gains arising on those assets to the tax exempt categories of business. A possible solution to this issue was the subject of debate between HMRC and the industry throughout 2005 with the result that HMRC's original proposals, announced in the pre-Budget Report in December 2004, were fine-tuned to ensure that they were more precisely targeted. The solution was then given effect in May 2006. These regulations were subsequently enacted in primary legislation by FA 2006, Sch 11, para 1 but it soon became clear that they had failed in their revenue raising purpose so they were repealed in FA 2008 with retrospective effect for periods of account beginning on or after 1 January 20071.

Otherwise

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