Corporation Tax Act 2009 section 387

Treatment of deficit on basic life assurance and general annuity business: introduction

Section 387 introduces special rules that apply when an insurance company has a non-trading deficit from loan relationships arising from its basic life assurance and general annuity business (BLAGAB).

• Where an insurance company has a non-trading loan relationship deficit on its BLAGAB, special rules in sections 388 to 391 apply instead of the normal non-trading deficit rules
• These special rules operate within the I minus E framework used to tax life insurance company profits
• The normal non-trading deficit provisions in Chapters 16 and 16A are displaced entirely for BLAGAB deficits
• The terms "the deficit" and "the deficit period" used throughout sections 388 to 391 refer to the specific BLAGAB non-trading deficit and the accounting period in which it arises