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offset of blagab losses and 50% rule

Discussion in 'SA2' started by yogesh167, Sep 6, 2019.

  1. yogesh167

    yogesh167 Very Active Member

    Hello
    Few cases for tax calc for BLAGAB of proprietory co below:
    Case 1, I-E= negative 30 and MP=50
    Case 2, I-E = 30 and MP=50
    Case 3, I-E= 30 and MP= negative 30

    Please confirm how much and in which case tax is payable. Also, how much can b carry forward (50%/100%) to offset in next yr profit?

    Thanks in advance
     
  2. Aladinsane

    Aladinsane Keen member

    Case 1: MP test bites, insurer pays tax on MP, policyholder pays no tax.
    Case 2: MP test bites, insurer pays tax on MP, policyholder pays no tax.
    Case 3: MP floored at 0, so MP = 0. MP test does not bite, insurer pays no tax, policyholder pays tax on full I-E. Insurer carries losses of 30 subject to 50% and £5m rule.

    I'd question whether case 1 can actually happen.
     
  3. Em Francis

    Em Francis ActEd Tutor Staff Member

    Hi
    Case 1: Bring I-E to equal min profit and c/f 80 and tax min profit of 50 at s/h rate.
    Case 2: Bring I-E to equal min profit and c/f 20 and tax min profit of 50 at s/h rate.
    Case 3: Tax I-E of 30 at p/h rate and set min profit to zero and c/f 30.
    Thanks
    Em
     
    Aladinsane likes this.
  4. Aladinsane

    Aladinsane Keen member

    Ah yes I forgot XSE for case 1 and 2!
     
  5. yogesh167

    yogesh167 Very Active Member

    Does 50% carry forward loss apply to BLAGAB business as well like Non BLAGAB business?
     
  6. Em Francis

    Em Francis ActEd Tutor Staff Member

    Yes :)
     

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