Section 371CF | Does Chapter 7 apply? ^F1

(1)Chapter 7 (captive insurance business) applies for a CFC's accounting period if (and only if)—^F1

(a)at any time during the accounting period, the main part of the CFC's business is insurance business, and^F1

(b)the CFC's assumed total profits include amounts falling within subsection (2).^F1

(2)An amount falls within this subsection if it derives (directly or indirectly) from—^F1

(a)a contract of insurance which is entered into with—^F1

(i)a UK resident company connected with the CFC, or^F1

(ii)a non-UK resident company connected with the CFC acting through a UK permanent establishment, or^F1

(b)a contract of insurance which—^F1

(i)is entered into with a UK resident person, and^F1

(ii)is linked (directly or indirectly) to the provision of goods or services to the UK resident person by a UK connected company.^F1

(3)In subsection (2)(b)(ii)—^F1

“services” does not include services provided as part of insurance business, and

“UK connected company” means—

(a)a UK resident company connected with the CFC, or

(b)a non-UK resident company connected with the CFC acting through a UK permanent establishment.