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What is the corporation tax rate?

C

curiousactuary

Member
On page 19 of chapter 7 (life insurance company taxation) of the SA2 course notes for the 2019 examinations there is a question asking to calculate the tax payable by a mutual where

I (BLAGAB) = 300
E (BLAGAB) = 200

The answer is given as:
Tax = (300 – 200) × 20% = 20.

1. Is the 20% referring to the corporation tax rate for shareholders.

2. If so, shouldn't the corporation tax rate be 19% now for the 2020/2021 tax year?

3. Also, wasn't it 19%, in the 2019 to 2020 financial year - if so, why do the course notes use 20%?
 
curiousactuary said:
On page 19 of chapter 7 (life insurance company taxation) of the SA2 course notes for the 2019 examinations there is a question asking to calculate the tax payable by a mutual where

I (BLAGAB) = 300
E (BLAGAB) = 200

The answer is given as:
Tax = (300 – 200) × 20% = 20.

1. Is the 20% referring to the corporation tax rate for shareholders.
This company is a mutual so will be taxed at the policyholder rate of 20% only as no shareholder profit to tax.


2. If so, shouldn't the corporation tax rate be 19% now for the 2020/2021 tax year?

3. Also, wasn't it 19%, in the 2019 to 2020 financial year - if so, why do the course notes use 20%?
Click to expand...
This company is a mutual so will be taxed at the policyholder rate of 20% only as no shareholder profit to tax. This is always assumed to be 20% (as examples in CR are UK only).
 
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