Hi guys another tax question. Are che reserves for unexpired risks tax deductible? I'm finding the core reading statement "in respect of claims for which reserves not established" a bit opaque. Would assuming che on incurred claims is tax dedictible while che on other business is not, be over simplifying things here? Don't want to get bogged down here!
Tax on unearned business I think your question is answered in chapter 3 on page 10 in the ActEd study materials. The rules for calculating UPR, URR and AURR are discussed and the potential for disagreements between HMRC and the insurance company are the subject of two questions, the clear implication being that such reserves are appropriately part of the technical provisions are therefore tax deductible. This would seem right since, on an annual accounting basis, it should not be possible to realise profit from business that has not yet been earned so it should not be taxed. Hope that helps.
