Blagaab

[Abhilasha]

Under blagaab, if min profit is negative we will only pay policyholder tax rate and carry forward 50% of loss or upto 50% of next year profit?

Example at t=1

Min profit is -50
I-e is 90
And say at t=2
Min profit is 90
I-e is 60

So in t1 we pay p/h tax on 90 and carry forward rest mp.

In year 2 we offset min profit with 25 (50% of -50) or 45 (upto 50% of 90)?
Further min profit test to assess how much is payable at ph tax rate, year 2 will be based on after offset amount of min profit ?
Thirdly what is the relevance of 5mn? And situations where it might be used 5mn + 50%? Can you provide an example?

 

[Aladinsane]

I think the rule is that if profits are less than £5m then the offsetting losses can be used unrestricted. Anything over this the offset is capped to 50% of the profits. So the second in your question.

See paragraph 31 of this for why i think that https://assets.publishing.service.g...tax_relief_for_carried-forward_losses_EN_.pdf

Yes min profit test is done after offsetting losses.

If profit is less than £5m in year 2 then it can be fully offset if there are >=£5m losses in the previous year. So that profit is 0.