How are BLAGAB tax credits paid to life assurance companies under section 1167?

Under Corporation Tax Act 2009 section 1167, BLAGAB tax credits are paid by HMRC to life assurance companies using the same rules that govern the payment of land remediation tax credits. The existing provisions for how and when payment is made apply equally, with references to land remediation tax credits read as referring to BLAGAB tax credits instead.

Is a BLAGAB tax credit payment treated as taxable income?

No, a BLAGAB tax credit payment is not treated as income of the life assurance company for corporation tax purposes. This mirrors the treatment of land remediation tax credits, ensuring that the receipt of the credit does not create an additional tax liability for the company claiming it under United Kingdom law.

How does section 1167 affect capital gains calculations for life assurance companies?

Section 1167 excludes qualifying Chapter 4 expenditure from capital gains calculations, mirroring the exclusion that applies to qualifying land remediation expenditure for other companies. This means life assurance companies do not have their capital gains affected by expenditure that gave rise to a BLAGAB tax credit claim.

What land remediation tax credit rules are adapted for BLAGAB tax credits?

Four land remediation tax credit provisions are adapted: HMRC's obligation to pay the credit, supplementary rules on payment mechanics, the principle that payments are not treated as company income, and the exclusion of qualifying expenditure from capital gains calculations, with references modified from land remediation expenditure to qualifying Chapter 4 expenditure.

Corporation Tax Act 2009 section 1167

Payment of tax credit etc.

Section 1167 applies the existing rules for paying and treating land remediation tax credits to BLAGAB (basic life assurance and general annuity business) tax credits claimed by life assurance companies.

The rules governing payment of land remediation tax credits by HMRC also apply to BLAGAB tax credits for life assurance companies
Supplementary provisions about how the tax credit is paid apply equally to BLAGAB tax credits
A BLAGAB tax credit payment is not treated as income of the company, mirroring the treatment of land remediation tax credits
Qualifying Chapter 4 expenditure is excluded for capital gains purposes, just as qualifying land remediation expenditure would be

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