LAM09230 | Double Tax Relief: Credit relief restriction where profits calculated on trading basis: meaning of total relevant expenses and total income TIOPA10/S103

Definitions of total relevant expenses and total income in TIOPA10/S100 for the calculation of the first (expenses) limitation (see LAM09210) are given in TIOPA10/S103.

Total relevant expenses (TIOPA10/S103(5)) is the sum of:

• the claims incurred, net of reinsurance

• the changes in other technical provisions, net of reinsurance

• investment management expenses

unless the sum is a negative amount, in which case the total relevant expenses will be nil, and no expenses will fall to be deducted from the relevant income.

Total income (TIOPA10/S103(2)) is the excess of the sum of the incomings listed in S103(3) over the sum of the outgoings in S103(4).

The incomings in S103(3) are:

• earned premiums, net of reinsurance

• investment income and gains

• other technical income, net of reinsurance

The outgoings in S103(4) are:

• acquisition costs

• the change in deferred acquisition costs

• losses on investments

The amounts included for the purposes of S103(3) to S103(5) are the amounts taken into account for corporation tax.

Where any of the terms used in these subsections is a term used in the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations SI2008/410/SCH3/PART1/Section B (which relate to the profit and loss account format) the terms have the same meaning as in those regulations. This applies regardless of whether the company uses those regulations to produce its accounts.