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Insurance Premium Tax | Update on
consultations | UK distributions received by insurance
companies
Insurance Premium Tax
The Government proposes to remove the requirement for overseas insurers to
appoint a UK tax representative. Overseas insurers will in future be able to
choose whether or not to appoint an agent to act for them in the UK, and the
law will also be changed so agents or representatives no longer have joint
and several liability for the IPT. Joint and several IPT liability will also
be ended for policy holders except in circumstances where the insurer is not
located in the EU or covered by mutual assistance directives or similar
arrangements.
Our view
These changes follow a consultation last Autumn and should make
compliance easier for non-UK insurers |
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Update on consultations
The Budget materials refer to three ongoing consultations in the general
insurance area:
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General insurance reserves - discussions continue on
devising and defining an appropriate ceiling for tax deductions for
general insurance technical provisions and Lloyd's reinsurance to close,
together with the procedures that HMRC will use to assess risk and
potential enquiry cases. HMRC aims to make Regulations this year but
does not now expect them to be finalised until the Summer.
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Use of general insurance losses - the Government has
announced further discussions with the insurance industry on the use of
losses, in the light of the regulatory constraints affecting insurers.
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Claims equalisation reserves for Lloyd's corporate
members - work is continuing on a possible extension of tax relief to
Lloyd's corporate members on the basis of some detailed proposals from
Lloyd's.
Our view
All three consultations are continuing from last year's Budget, and are
being considered as part of the Government's agenda to enhance the
competitiveness of UK financial services. There remains a good deal of
work to be done on each, however, both in terms of designing proposals
and for HMRC to assess their potential cost/benefits. |
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UK distributions received by insurance companies
The changes affecting PHI business written by life companies also apply to general insurance companies.
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