Section 563 — Corporation Tax Act 2009: Increased non-trading credits for BLAGAB and EEA taxed contracts

Increased non-trading credits for BLAGAB and EEA taxed contracts 563 1 This section applies if—

a as a result of section 562 the relevant company is required to bring into account for an accounting period a non-trading credit representing a profit from a related transaction, and b the investment life insurance contract is—

i a BLAGAB contract, or ii a contract which is subject to a relevant comparable EEA tax charge.

2 For the meaning of “BLAGAB contract” and of a contract being subject to a relevant comparable EEA tax charge, see section 564.

3 The non-trading credit is treated as increased by the relevant amount.

4 The relevant amount is set off against corporation tax assessable on the company for the accounting period.

5 Except where section 565 (relevant amount where the relevant company uses fair value accounting) applies, the relevant amount is— NTC × AR 100 - AR where— NTC is the non-trading credit, and AR is the appropriate rate for the accounting period.

6 The appropriate rate for an accounting period is—

a if a single rate of tax under section 102(3) of FA 2012 (lower corporation tax rate on certain insurance company profits) is applicable in relation to the accounting period, that rate, and b if more than one such rate of tax is applicable in relation to the accounting period, the average of those rates over the accounting period.