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Tax for with Profit

Discussion in 'SA2' started by Garima Chawla, Apr 16, 2022.

  1. Garima Chawla

    Garima Chawla Member

    Could you please explain how the tax is calculate for with profit fund. As per flash card:
    • "Compare the company and aggregate fund level tax computations and allocate the difference using an agreed proportion.
    • Make use of specific provisions that are designed to protect a withprofits fund from tax charges arising from the shareholder environment, or allowing the With-Profits Actuary to override the default approach in specific circumstances."
    Does this mean for policholder it will be in hands of policyholder, similar to General Annuity.
    If yes, the how is with profit taxed for the company. For shareholder it will be BLAGAB?
     
    Garima Chawla, Apr 16, 2022
    #1
  2. Lindsay Smitherman

    Lindsay Smitherman ActEd Tutor Staff Member

    With-profits business is classified in the same way as any other business for tax purposes, so it simply depends on the contract type. Some with-profits contracts will be BLAGAB business (eg life assurance savings contracts) some non-BLAGAB (eg pensions contracts).
     
    Lindsay Smitherman, Apr 19, 2022
    #2

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