11 July 2018
The Life Office Taxation Working Party (TWP) keeps abreast of new developments in the area of Life Office Taxation. We aim to offer an annual presentation on relevant matters to the Life Conference, and we are currently supported by having a taxation professional (Lindsay J’afari-Pak, PwC) as a member of the Working Party.
Over the last year and a half, we have provided input to HMRC in relation to industry’s proposal to limit relief of carry forward losses to 50% of future profits and so limiting the adverse impact on capital requirements of the changes to loss relief. We have also provided input to the insurance-specific considerations needed when drafting rules to limit the level of deductible interest for tax purposes and reviewed the finally agreed draft regulation for the taxation of reassurance business (we did not feel that any comment needed to be provided by TWP).
We gave a well-received presentation to the Life Conference 2017, and some of our members have assisted HMRC with an ongoing re-write of the Life Assurance [Tax] Manual (LAM) which needed to be redrafted to reflect the evolution of the business and the tax environment since the last revision (thought to be around 15 years ago). Similarly, we have assisted the Institute and Faculty of Actuaries in redrafting tax related education material.
Ongoing activity includes the consideration of potential tax implications from IFRS 17, and preparation of a presentation to the Life Conference 2018.
Looking forward, the consequences of IFRS 17 and possibly also Brexit are likely to generate ongoing interest and doubtless other matters will arise as part of the annual budget process and other developing objectives of HMRC.