Hi, "a mutual would not normally have a taxable non-BLAGAB profit" but if a mutual offers and sells products which are subject to non-BLAGAB tax rules for example: - pension business or - PHI business these products have to be taxed based on a formula on trading profit. So in this situation how would these products be treated for tax purposed if a mutual does not have taxable non-BLAGAB profits?
Non-BLAGAB business is taxed on trading profit, as you say. But a mutual does not (normally) make any profit, so it would be taxed on a non-BLAGAB profit of zero. Hence a mutual does not have to pay any tax on non-BLAGAB products.