(Draft) The Insurance Contracts (Tax) (Change in Accounting Standards) and the Finance Act 2022 (Part 2 of schedule 5) Commencement and Transitional Provisions Regulations 2022
We welcome views on the draft tax regulations to spread the transitional impact of IFRS 17 and revoke the requirement for life insurance companies to spread acquisition expenses over 7 years for tax purposes.
On 16 May 2022, the UK Endorsement Board endorsed IFRS 17, the new international accounting standard for insurance contracts. IFRS 17 will become mandatory for UK companies reporting under International Accounting Standards (IAS) for accounting periods beginning on or after 1 January 2023.
A consultation ran between November 2021 and February 2022 to inform the design of the tax regulations to deal with the accounting change. The consultation response was published on 20 July 2022 and set out the government’s proposals.
These regulations will exercise the powers conferred by paragraphs 1, 4 and 5 of schedule 5 to the Finance Act 2022.
It is expected that the regulations will be made during autumn 2022 and will apply to accounting periods beginning on or after 1 January 2023.
Before submitting your response, you can read the draft regulations on this page.
These regulations will be of interest to:
- all insurers who report under IAS
- any non-insurers who report under IAS and who will be affected by IFRS 17 because they issue contracts which meet the IFRS 17 definition of an insurance contract
- all life insurance companies that write Basic Life Assurance and General Annuity Business (BLAGAB) and are currently required to spread acquisition expenses over 7 years for tax purposes under section 79 of Finance Act 2012