Finance Act 2012

The comparison etc

7(1)Each of the items determined in accordance with paragraph 6(1)(a) is a “relevant computational item” for the purposes of this Part of this Schedule except in so far as it consists of an excluded item.

(2)An item is “an excluded item” in so far as it—

(a)represents an amount forming part of the company’s deferred acquisition costs which is included in its 2012 balance sheet and which has been taken into account in calculating its life assurance trade profits,

(b)represents an amount which is included in the company’s 2012 balance sheet as an asset in respect of the value of future profits arising from a business (or part of a business) transferred to the company (but excluding an asset so far as it is regarded for accounting purposes as internally-generated),

(c)represents an outstanding contingent loan or an outstanding re-insurance amount,

(d)represents an asset to which Part 8 of CTA 2009 (intangible fixed assets) applies for an accounting period of the company beginning on or after 1 January 2013, or

(e)falls within a description of item excluded for the purposes of this paragraph by regulations made by the Treasury.

(3)In sub-paragraph (2)(c) “outstanding contingent loan” means the total amount of the credits brought into account by the company as part of total income—

(a)for the period of account ending immediately before 1 January 2013, or

(b)for any earlier period of account,

in respect of money debts so far as those debts have not been repaid before that date.

(4)In sub-paragraph (2)(c) “outstanding re-insurance amount” means the total of the amounts which would (but for section 83YF(2) of FA 1989) have been taken into account in calculating the company’s life assurance trade profits—

(a)for the period of account ending immediately before 1 January 2013, or

(b)for any earlier period of account,

in respect of the re-insurance of relevant liabilities (within the meaning of section 83YC of FA 1989) to the extent that they have not ceased to be re-insured before that date.

(5)In this paragraph “life assurance trade profits” means profits arising from life assurance business calculated in accordance with the provisions applicable for the purposes of the taxation of such profits under section 35 of CTA 2009 (charge on trade profits).

(6)For any accounting period beginning on or after 1 January 2013, an amount is not to be taken into account—

(a)in calculating the BLAGAB trade profit or loss of any basic life assurance and general annuity business, or

(b)in calculating for corporation tax purposes the profits of non-BLAGAB long-term business,

in so far as the amount consists of an excluded item as a result of falling within sub-paragraph (2)(a) to (d) or, in a case where the regulations provide for the application of this sub-paragraph, within sub-paragraph (2)(e).