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%?
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).
