FA 2012, Part 2, Ch. 6 sets out the specific tax provisions relating to life assurance companies’ trade calculations.

Allocation to policyholders

Amounts allocated to policyholders as bonuses are deductible for tax purposes. However, there is no deduction for capital bonuses allocated to with-profit policyholders which have been funded out of non-taxed income. FA 2012, s. 110(3) includes reattribution of inherited estate as capital bonuses.

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