The absence of clear-cut accounting and regulatory guidance can make the correct tax treatment of reinsurance, financial reinsurance and ART products generally difficult to determine. The starting point for their tax treatment is in accordance with normal trading income principles. That is, the profit or loss for tax purposes is the profit or loss of accounts drawn up in accordance with UK generally accepted accounting practice (GAAP) disclosing a true and fair view of the company's results, subject to any specific tax rule of law (FA98/S42, re-enacted as ITTOIA05/S25 and CTA09/S46). This principle is, however, rather more difficult to apply in this area than in some others.

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