LAM10320 - Reinsurance: Excluded Business: Overseas companies SI2018/538/ Regulation 6

In certain limited circumstances, life reinsurance will be 鈥榚xcluded business鈥� and taxed as BLAGAB in the reinsurer where the cedant is not UK resident and within the charge to corporation tax on the business being reinsured CTA09/S5(2).

The conditions are that

  • the cedant is not UK resident or chargeable to tax on a permanent establishment.
  • the business is not Overseas Life Assurance Business (OLAB) in the hands of the cedant (i.e. it is taken out of OLAB by the OLAB regulations) and
  • the benefits under the policy reinsured are determined by reference to the value of matched assets consisting wholly or mainly of UK land.

OLAB is not BLAGAB (FA12/S57(2)(f)) and is defined in FA12/S61 and in regulations SI2000/2089 and . The OLAB category is intended to exclude, business written with non UK policyholders from the I-E charge. More detail on the definition of OLAB is in LAM01140.

鈥渓and鈥� includes:

  • buildings and other structures.
  • land covered with water.
  • any estate, interest, easement, servitude, right or licence in or over land.

Regulation 6 is intended to protect the tax charge on income and gains from UK land.