What does section 1168 of the Corporation Tax Act 2009 do?

Section 1168 prevents a life assurance company from obtaining double relief by claiming a BLAGAB tax credit on a qualifying loss and also carrying forward that same loss as excess BLAGAB management expenses to reduce taxable profits in future accounting periods under the I-E basis of taxation.

How does section 1168 reduce excess BLAGAB expenses carried forward?

When a life assurance company claims a BLAGAB tax credit, the amount of excess BLAGAB expenses available for carry forward is reduced by the surrendered loss — that is, the portion of the qualifying BLAGAB loss on which the land remediation tax credit claim is based for the accounting period.

What is the surrendered loss under section 1168 CTA 2009?

The surrendered loss is the amount of the qualifying BLAGAB loss in respect of which the life assurance company claims a land remediation tax credit. Once that loss generates a tax credit, it cannot also feed into the carried-forward expense pool that would otherwise reduce future taxable profits.

How does section 1168 relate to section 1158 of the Corporation Tax Act 2009?

Section 1168 is the life assurance company equivalent of section 1158, which applies the same double-relief prevention principle to trading companies claiming land remediation tax credits. Section 1168 extends that logic specifically to life assurance companies operating under the I-E basis of taxation.

Corporation Tax Act 2009 section 1168

Restriction on carrying forward expenses payable where tax credit claimed

Section 1168 prevents a life assurance company from both claiming a BLAGAB tax credit on a qualifying loss and carrying forward that same loss as excess expenses to set against future profits.

Applies when a life assurance company claims a BLAGAB (basic life assurance and general annuity business) tax credit for an accounting period
The amount of excess BLAGAB expenses available to carry forward to future periods must be reduced by the amount of the loss surrendered for the tax credit
The "surrendered loss" is the portion of the qualifying BLAGAB loss in respect of which the land remediation tax credit is claimed
This is the life assurance company equivalent of the general rule in section 1158, ensuring no double benefit from the same loss

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