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

In certain limited circumstances, life reinsurance will be ‘excluded business’ 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 SI2007/2086. 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.

“land” 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.