Corporation Tax Act 2009 section 471

Creditors who are insurance companies carrying on BLAGAB

Section 471 sets out the conditions that must be met for an insurance company carrying on basic life assurance and general annuity business (BLAGAB) to be exempt from the connected parties rules when it is a creditor in a loan relationship.

• The creditor must be an insurance company carrying on basic life assurance and general annuity business (BLAGAB) in the relevant accounting period.
• The asset representing the loan relationship must be matched to a BLAGAB liability for that period.
• The additional conditions set out for financial traders (conditions C, D and E in section 469) must also be satisfied in relation to the asset.
• If all three conditions are met, the normal connected parties rules under section 468 do not apply, allowing the creditor to use fair value or other accounting methods rather than being restricted to an amortised cost basis.