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tax in asset share

Discussion in 'SA2' started by Viki2010, Sep 10, 2017.

  1. Viki2010

    Viki2010 Member

    one of deductions from the asset shared is tax (if applicable).
    What kind of tax is covered here as an explicit deduction from asset share?
    The core reading explains that tax on shareholder transfers is typically covered from inherited estate or by shareholders directly. Furthermore, the core reading explains that for blagab business the expenses and investment returns are net of tax.
    How is non-blagab treated?
     
    Viki2010, Sep 10, 2017
    #1
  2. Lynn Birchall

    Lynn Birchall ActEd Tutor Staff Member

    For BLAGAB business, the tax deducted might be the policyholders' share of the company's I-E BLAGAB tax assessment. That is what using net expenses and net investment returns is aiming to achieve. As the Core Reading also mentions, there might in addition be a deduction for tax that will be payable in future in respect of any unrealised gains (on equities and property) that under BLAGAB tax rules will only be taxed in the future (when the gains are realised). The Core Reading also says that knowledge of how these might be treated is not required for SA2 :)

    Recalling that Non-BLAGAB business is taxed on profit, all of this tax may be considered shareholder tax. So, there is no reason to net down investment return and expenses in the asset share calculation in this case.

    Best wishes
    Lynn
     
    Lynn Birchall, Sep 11, 2017
    #2
  3. Viki2010

    Viki2010 Member

    Thank you! :)
     
    Viki2010, Sep 11, 2017
    #3

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